LFUS - Embedded Expectations Analysis - 2021 04 07
Littelfuse, Inc. (LFUS:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 26.2x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about their operating margins, customer demand, and variable costsSpecifically, management may lack confidence in their ability to develop new solutions in overvoltage and thermal protection, profitably grow in the industrial segment, and sustain their operating margins. In addition, they may have concerns about the sustainability of customer demand, particularly from nonresidential construction markets, and they may be downplaying concerns about continued pandemic-related headwinds. Furthermore, they may be overstating the progress of their global presence expansion across commercial vehicle applications as well as their focus on reinvesting in best-in-class organic growth. Finally, management may be concerned about the impact of the pandemic on M&A opportunities, supply constraints from semiconductor manufacturers, and their reinstatement of certain variable costs
Littelfuse is a manufacturer of technologies in circuit protection, power control and sensing. The company has three segments: Electronics, which provides fuses and fuse accessories, positive temperature coefficient resettable fuses, polymer electrostatic discharge suppressors, varistors, and gas discharge tubes; Automotive, which consists of circuit protection, power control and sensing technologies for original equipment manufacturers, Tier-I suppliers and parts distributors in the passenger car, agricultural, construction and other commercial vehicle industries; and Industrial, which includes power fuses, protection relays and controls and other circuit protection products.
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