Fabrinet Stock Reaches Record High on Solid Results and AI Opportunity

Contract electronics manufacturer Fabrinet (FN) saw its stock reach a new closing high on Tuesday, as analysts highlighted the company’s solid quarterly results and potential in artificial intelligence.

According to Dow Jones Market Data, Fabrinet stock surged 32% to $153.66, marking a record closing high based on prices dating back to June 2010.

Lake Street Capital Markets analyst Troy Jensen, in a recent report, maintained a Buy rating on Fabrinet and raised his price target from $130 to $165. Jensen was impressed by the company’s strong fourth-quarter results and its alignment with Wall Street’s financial forecasts. He mentioned that although customers are looking to reduce their inventories, the large artificial intelligence transceiver project will offset this and drive overall growth for Fabrinet. Jensen further stated that the company has good visibility into the continued strength of the datacom industry and expects growth to accelerate in 2024 as normalcy returns to legacy telecom demand.

Fabrinet supplies components, lasers, and subsystems to various blue-chip customers, Jensen noted. Given the company’s leadership position in the market, consistent growth, profitability, and favorable entry point, he believes it is a prime time for investors to start building or increasing their positions in Fabrinet.

Similarly, Needham analysts were also optimistic about Fabrinet’s prospects. In their Tuesday report, they acknowledged the company’s recent financial results and its potential for benefiting from AI. They maintained a Buy rating on the stock, raised their target price from $150 to $165, and increased their revenue and earnings forecasts.

Fabrinet recently announced fourth-quarter revenue and adjusted earnings that surpassed Wall Street’s consensus. Its guidance for the first fiscal quarter also aligned with analysts’ expectations.

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