ST
Sensata Technologies Holding plc
$48.59
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 63.8% above fair value
You pay
$48.59
Bear
$23.73
Fair
$29.67
Bull
$35.61
Bear
$23.73
-51.2%
$1.58 × 12x P/E
Fair
$29.67
-38.9%
$1.58 × 15x P/E
Bull
$35.61
-26.7%
$1.58 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
30.7x
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 $47.50 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $29.67 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 $47.50 (from 29 analysts). Our estimate is 50% 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