Contract electronics manufacturer
Fabrinet
stock hit a new closing high as analysts pointed to solid quarterly results and an opportunity in artificial intelligence.
Fabrinet stock (ticker: FN) gained 32% to $153.66 on Tuesday, a record closing high based on prices going back to June 2010, according to Dow Jones Market Data.
Lake Street Capital Markets analyst Troy Jensen maintained a Buy rating on Fabrinet and lifted his price target to $165 from $130 in a Tuesday report.
Jensen said the company had solid fourth-quarter results and issued financial forecasts in line with Wall Street’s expectations. Customers’ efforts to reduce their inventories are being offset by a large artificial-intelligence transceiver project that should boost overall growth for the company, he said.
“We believe Fabrinet has solid visibility into datacom strength continuing, and we believe growth will accelerate in calendar 2024 once legacy telecom demand returns to normal,” he wrote.
The company produces components, lasers, and subsystems for a variety of blue-chip customers, the analyst said. “Given our conviction regarding Fabrinet’s leadership position in this market, a strong track record of growth and profitability, coupled with an attractive entry point, we believe now is a great time for investors to start building or adding to positions,” he added.
Needham analysts were also upbeat on the stock. In a Tuesday report, they acknowledged Fabrinet’s recent financial results and potential to benefit from AI. They maintained a Buy rating on the stock, lifted their target for the price to $165 from $150, and raised their forecasts for revenue and earnings.
On Monday, Fabrinet posted fourth-quarter revenue and adjusted earnings that beat the Wall Street consensus. Its guidance range for the first fiscal quarter aligned with analysts’ expectations.
Write to Emily Dattilo at [email protected]
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