Delta Electronics Inc

2308: XTAI (TWN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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Delta Electronics Earnings: Overvalued Amid Lofty AI and EV Expectations; Valuation Increased 6%

Phelix Lee

Oct 31, 2024

Narrow-moat Delta Electronics is overvalued even though we increased our fair value estimate to TWD 352 from TWD 331. We foresee electric vehicle-related growth will be more volatile and view the market as overoptimistic on the profitability of cooling, ventilation, and power supply systems used on artificial intelligence servers. Delta is trading 5%-10% above its five-year historical average of 20 times next-year P/E, which is not attractive given the risks in AI and EVs.

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Delta Electronics Inc

Delta Electronics Earnings: Overvalued Amid Lofty AI and EV Expectations; Valuation Increased 6%

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