Sensata: Investor Day Confidence and Targets Match Our Long-Term Bullishness

We maintain our $71 fair value estimate for shares of narrow-moat Sensata Technologies after its 2023 investor day reinforced our long-term bullishness on its growth opportunities within electrification. Sensata set forth impressive financial targets for 2026, including high-single-digit sales growth that aligns with our model. The firm also raised its long-term target margin range—toward which we hold mild skepticism—but we view the focus on profitability positively. Sensata also announced restructuring efforts to improve profits in the short term against struggling end markets. We continue to see shares as significantly undervalued for long-term investors. We believe the market is underappreciating Sensata's strong opportunity within electrical protection for autos and heavy vehicles and we look for higher growth over the next three years to drive up the stock.