Analyst Note| William Kerwin |
Narrow-moat Sensata surpassed the top end of its guidance in its second quarter and expects moderation in the second half of 2021. We’re maintaining our $75 fair value estimate and continue to think the market is overlooking the firm’s tremendous growth opportunities in electrified vehicles. Sensata has overshot its long-term targets for outperforming its underlying markets since 2018, and we expect this to continue as an electrifying global vehicle fleet embeds more sensor content. With shares trading at a 38% discount to our fair value estimate, we think Sensata is an attractive investment into electrification and connectivity trends.