Littelfuse Earnings: Soft Pockets Remain, but Our Long-Term Expectations and $310 FVE Are Intact

We maintain our $310 fair value estimate for shares of narrow-moat Littelfuse after its third-quarter results met our expectations. The firm’s fourth-quarter guidance missed our model, but we continue to expect results to begin a recovery in 2024 and grow meaningfully in 2025. Littelfuse continues to see customers moderating orders as they work through existing inventories, and weaker end demand in markets like industrial equipment, heavy vehicles, and consumer applications. Long term, we continue to see the firm as a beneficiary of secular trends toward electrification and higher voltage, and we expect it to outperform its end markets during a rebound due to content growth. We see shares as undervalued.