Sensata downgraded to Neutral at BofA after margin guidance reset

As previously reported, BofA analyst Wamsi Mohan downgraded Sensata to Neutral from Buy with a price target of $38, down from $46. Management’s reset FY24 operating margin expectations implies a range of 19.2%-19.5%, versus prior guidance of 20%-21%, the analyst tells investors. While the reset in expectations is “disappointing,” the firm sees it as “a prudent step in a weak macro” environment, the analyst tells investors. However, the firm is lowering its rating as it weighs the near-term headwinds, including lower margins in FY24, estimates that are “unlikely to see upside soon” in FY24, and cash flow improvement that may take time, the analyst added.