Littelfuse Earnings: 2024 Looks Soft, but We Retain Long-Term Optimism and See Upside in the Stock

We have lowered our fair value estimate for narrow-moat Littelfuse to $295 per share from $310 to incorporate weaker results in the short term. Fourth-quarter results met our expectations, but guidance for the first quarter and commentary on the full year missed our model. Littelfuse continues to manage mixed demand across its end markets, with inventory destocking hampering new electronics orders, pockets of weakness affecting industrial demand, and automotive orders staying stable. We expect headwinds to continue in 2024 but make way in the back half of the year for growth. Still, we now expect a modest decline in sales in 2024, compared with our previous expectation for modest growth. We continue to believe Littelfuse is well positioned to capitalize on electrification and higher voltages across vehicles, industrial equipment, and consumer devices in the long run. We anticipate demand and results will rebound toward the end of 2024 and continue into 2025. We see the shares as nicely undervalued.