Goldman Sachs is looking beyond Tesla and Nikola to some of the suppliers that could benefit from the focus on electric vehicle tech.
Sensata Technologies (NYSE:ST) was added to the firm’s Conviction Buy List this year on its view that it is positioned to be a winner in the space. “Sensata raised its 3Q20 guidance on 9/8/20 as a result of improving fundamentals in its auto business. We believe valuation is attractive as the stock trades at 12X normalized EPS compared to the peer median of 18X,” updates GS.
TE Connectivity (NYSE:TEL) is also singled out by Goldman. “TE is increasingly offering both sensors and connectors as a solution to help address both safety and emissions reductions,” notes analyst Mark Delaney.
Aptiv (NYSE:APTV) is also seen as an EV winner due to its strong market positions in connectors, high voltage harnesses and autonomy and recent positive order momentum.
Amphenol (NYSE:APH) is also recommended. “We believe that Amphenol is well positioned to beneﬁt from increasing connector and sensor content per vehicle, and the company’s organic auto revenue has outgrown auto production at a mid to high single digit rate on average historically,” notes Delaney.
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