Analyst Note
| William Kerwin |We are raising our fair value estimate for narrow-moat Sensata Technologies to $70 per share from $50, due to higher profitability and longer-term growth assumptions in our forecast. Sensata’s share price has underperformed the market for several years as the firm has navigated shifts in customer preferences and weak end markets, but we think it is primed for an inflection point as its primary markets rebound in 2021 and new adjacent markets begin to add value. With shares trading at a 12% discount to our fair value estimate, we think Sensata forms an attractive opportunity for long-term investors looking to benefit from trends toward electric vehicle adoption and connectivity.