Sensata Technologies' (ST) progress on operating and cash flow improvement is underappreciated, while the automotive business has largely reset for drivetrain and geographic variances in original equipment manufacturer production, Oppenheimer said in a Friday note.

Oppenheimer said recent earnings results have been positive, with sales and adjusted EPS above guidance in five straight quarters.

The firm credited management changes, a more disciplined operating posture and better forecasting and internal measurement.

Oppenheimer also noted Sensata Technologies has divested about $200 million of stale stock keeping units and non-core mix, including some acquisition misfires.

"We expect that 2026 will start to see specific new business wins that demonstrate commercial potential unlocking," the firm said.

Oppenheimer maintained its outperform rating on Sensata Technologies and set a $50 price target.

Price: 38.97, Change: +0.28, Percent Change: +0.72