ST
Sensata Technologies Holding plc
$45.02
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 45.7% above fair value
You pay
$45.02
Bear
$24.71
Fair
$30.89
Bull
$37.08
Bear
$24.71
-45.1%
$1.58 × 12x P/E
Fair
$30.89
-31.4%
$1.58 × 15x P/E
Bull
$37.08
-17.7%
$1.58 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
28.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $52.38 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $30.89 per share.
Warnings
The company's reported profits differ from official accounting profits by 653%. Check what costs are being left out of the adjusted number.
The company pays out 229% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $52.38 (from 29 analysts). Our estimate is 55% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples