UPDATE: Stifel Reiterates Buy Rating, Raises PT on Fabrinet on Expectation of Healthy Optical Trends

In a report published Wednesday, Stifel analyst Patrick Newton reiterated a Buy rating on Fabrinet FN, and raised the price target from $22.00 to $24.00. In the report, Stifel noted, “After recent optical communications channel checks our analysis indicates trends are generally positive through our coverage universe. Indications were most notably positive in datacom, especially with companies that have hyperscale/web 2.0 exposure, and to a lesser extent telecom, specifically with ROADMs/WSS and 100G products. Given Fabrinet has material customer exposure to the aforementioned trends (Oclaro = greater than 40% revenue generation from datacom, JDSU datacom approaching 20% of optical segment revenue with ROADMs/TXFP/SFP+ is about 30% of optical revenue, and Infinera DTN-X) our research indicates Fabrinet is likely to again exceed the high end of its revenue and earnings guidance range, although upside is likely to be at a more moderate level than impressive upside in the recently reported September quarter. Accordingly, we are increasing our above consensus estimates and raising our price target to $24.” Fabrinet closed on Tuesday at $19.38.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsPatrick NewtonStifel
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