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Fabrinet Stock Set to Reach New Heights as Analysts Highlight Strong Results and AI Opportunity


Contract electronics manufacturer, Fabrinet, is poised to achieve a new record closing high as industry analysts praise its solid quarterly performance and the potential for growth in the field of artificial intelligence (AI).

In Tuesday afternoon trading, Fabrinet’s stock soared by 30% to $151.29, positioning it at an all-time high based on prices dating back to June 2010, according to Dow Jones Market Data.

Troy Jensen, an analyst at Lake Street Capital Markets, reiterated a Buy rating on Fabrinet (ticker: FN) while upping his price target from $130 to $165 in a report released on Tuesday. Jensen cited the company’s impressive fourth-quarter results and financial forecasts that align with market expectations. He also noted that although customers’ efforts to decrease inventory pose challenges, the company’s involvement in a substantial AI transceiver project is expected to drive overall growth.

“We believe Fabrinet has a clear view of the continuing strength in datacom, and we anticipate that growth will accelerate in calendar year 2024 once demand for legacy telecom returns to normal,” Jensen wrote.

The analyst highlighted Fabrinet’s production of components, lasers, and subsystems for various prominent clients. He expressed confidence in the company’s leadership position within the market, its strong track record of growth and profitability, and deemed it an opportune time for investors to initiate or expand their positions in the company.

Similarly, analysts at Needham also had a positive outlook on Fabrinet’s stock. In their report on Tuesday, they acknowledged the company’s recent financial achievements and identified its potential for capitalizing on AI. They maintained a Buy rating on the stock, increased their price target from $150 to $165, and raised their revenue and earnings forecasts.

Fabrinet announced fourth-quarter revenue and adjusted earnings on Monday, surpassing the Wall Street consensus. Furthermore, their guidance for the first fiscal quarter aligns with analysts’ expectations.

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