Littelfuse (LFUS): Assessing Valuation Following Q3 Earnings Growth, Updated Outlook, and Dividend Confirmation

Littelfuse (LFUS) released its third quarter earnings, highlighting year-over-year gains in both sales and net income. The company also offered updated revenue guidance for next quarter and confirmed a cash dividend for shareholders.

See our latest analysis for Littelfuse.

Littelfuse’s latest results show the company building on solid fundamentals, but the share price hasn’t kept pace. Its 1-year total shareholder return is down 5.8%, while the stock is up just 2.8% year-to-date. Recent earnings and a confirmed dividend point to underlying strength. However, investors appear cautious, with momentum muted over the past several months.

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With the stock trading below analyst price targets despite rising sales and profits, investors may wonder whether Littelfuse is currently undervalued or if the market has already accounted for the company’s expected growth.

Most Popular Narrative: 21.6% Undervalued

With the consensus fair value of Littelfuse set at $307.50, and a last close at $241.22, the narrative sees significant upside potential. This gap highlights a bullish storyline and provides a foundation for key insights from a widely followed analysis.

The rapid buildout of renewable energy infrastructure, grid storage, and sustainable grid ecosystems is resulting in double-digit sales growth and a robust opportunity pipeline for Littelfuse. This positions the company to benefit from continued secular tailwinds and expand its addressable market, which should positively impact both revenues and margins.

Read the complete narrative.

Curious what powers this narrative’s high fair value? The answer lies in bold leaps in sales, earnings, and profit margin. Want the full scope of the assumptions behind the math? Uncover where analysts see Littelfuse heading next.

Result: Fair Value of $307.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent challenges in power semiconductors or increased competition could slow Littelfuse’s progress and undermine the optimistic outlook that analysts have forecasted.

Find out about the key risks to this Littelfuse narrative.

Another View: Comparing Price Ratios

The SWS DCF model points to Littelfuse trading below its estimated fair value, suggesting the stock is currently undervalued versus underlying cash flows. However, market pricing rarely stands still and DCF assumptions can change quickly. Which valuation will markets trust in coming quarters?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Littelfuse Narrative

If you see things differently or want to dive deeper into your own research, you can build a unique narrative. It takes less than three minutes to get started. Do it your way

A great starting point for your Littelfuse research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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