Undervalued Littelfuse Is Facing Short-Term Headwinds, but We're Confident in Long-Term Demand

We maintain our $318 fair value estimate for narrow-moat Littelfuse after its second-quarter results exceeded guidance and management gave a mixed view into the remainder of the year. Littelfuse is dealing with headwinds across its end markets, including coronavirus-related lockdowns, foreign-exchange rates, and softer electronics and automotive demand. We think such dynamics are short-term. Our long-term expectations for Littelfuse to outperform its end markets and benefit from secular trends toward electrification and efficiency are unchanged. Investors willing to endure some modest cyclicality have an attractive entry point.