What Happened?
Shares of sensor manufacturer Sensata Technology (NYSE: ST) fell 7.2% in the afternoon session after semiconductor stocks with significant exposure to the auto sector fell after US President Donald Trump announced a 25% tariff on all vehicles imported into the United States. The move raised concerns about a potential slowdown in global auto production, which would likely dampen demand for semiconductors used in automotive manufacturing.
Adding to investor anxiety, markets also appeared concerned that similar tariffs could eventually be extended to chipmakers.
Overall, the tariff announcement was poorly received by the broader market. The major indices pulled back slightly, reflecting growing worries about the potential negative impact on corporate earnings and economic growth.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Sensata Technologies? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Sensata Technologies’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago, when the stock gained 20.4% on the news that the company reported first quarter results, which exceeded analysts' EPS expectations. Its revenue also outperformed Wall Street's estimates. That guidance for next quarter was in line with expectations, showing that this company was on track.
The company also announced the retirement of CEO and President Jeff Cote; Martha Sullivan was appointed Interim President and CEO. Also, in consultation with activist investors, Elliott Investment Management, Sensata appointed Phillip Eyler to the Company's Board. Zooming out, we think this was still a decent, albeit mixed, quarter.
Sensata Technologies is down 4.8% since the beginning of the year, and at $25.93 per share, it is trading 39.7% below its 52-week high of $43.02 from May 2024. Investors who bought $1,000 worth of Sensata Technologies’s shares 5 years ago would now be looking at an investment worth $891.07.
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