Sensata’s Banal Q1 Doesn’t Change Our Excitement About Its Long-Term Opportunity; Maintain $75 FVE

Sensata Technologies’ first-quarter results and management commentary left us unimpressed but didn’t change our bullishness on its long-term prospects in electrification. We maintain our fair value estimate of $75 per share. We think Sensata continues to ride out residual weakness in the automotive market but think its fundamental long-term demand looks healthy. We continue to believe the market is undervaluing Sensata’s opportunity as a differentiated and sticky supplier, which underpins our narrow economic moat rating and growth forecast for the firm. We also think investors will welcome Sensata’s initiation of a quarterly dividend beginning in May. We view shares as attractive for long-term investors.