In a report released today, Alex Henderson from Needham maintained a Buy rating on Fabrinet (FN – Research Report), with a price target of $230.00.
Alex Henderson has given his Buy rating due to a combination of factors surrounding Fabrinet’s performance and future prospects. Despite the company’s guidance suggesting only single-digit growth in AI Data Comm sales, which initially caused the stock to dip in after-market trading, Henderson sees the current slowdown as a temporary setback. Supply challenges and a transition period ahead of new product launches have been cited as reasons for the current deceleration in growth. However, management is confident that these issues are short-lived and that there will be a growth reacceleration in the second half of the calendar year. Additionally, the December quarter’s performance exceeded expectations, which further supports the positive outlook.
Moreover, the early resolution of the fallout from the Intel business sale to Jabil is seen as a positive development, eliminating potential uncertainties sooner than anticipated. The telecom sector’s performance was also strong, coming in ahead of forecasts and is expected to continue its quarter-over-quarter growth. These factors contribute to Henderson’s belief in the stock’s potential and justify his Buy recommendation for Fabrinet, suggesting confidence in the company’s ability to navigate through the temporary challenges and capitalize on upcoming opportunities.
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Based on the recent corporate insider activity of 35 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FN in relation to earlier this year.
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Fabrinet (FN) Company Description:
Fabrinet engages in the provision of optical packaging and electronic manufacturing services to original equipment manufacturers. The firm’s engineering services include process design, failure analysis, reliability testing, tooling design, and real-time traceability system. Its manufacturing operations offer sensors, subsystems, customized optics, and optical modules and components. The company was founded by David Thomas Mitchell on August 12, 1999 and is headquartered in George Town, Cayman Islands.
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