Analyst Note| Joshua Aguilar |
After reviewing ITT’s investor day materials, nothing materially changes our investment conclusion. We were encouraged that management reiterated many of the same convictions we’ve held. These include friction technologies’ delivery times relative to competitors, its material science expertise, its strong brake pad market share (about 28% of the global market) as well as its consistent outperformance (800 basis points) relative to the light vehicle build market. While our numbers had some slight deviations from the company (we were a little higher on both market share and outperformance estimates), they were within a range of reasonableness. We maintain our $100 fair value estimate, and the narrow-moat-rated stock continues to trade at over a 30% discount to our intrinsic value.