UPDATE: Stifel Nicolaus Raises PT on Flexotronics on Continued Turnaround

In a report published Tuesday, Stifel Nicolaus analyst Matthew Sheerin reiterated a Buy rating on Flexotronics FLEX, and raised the price target from $9.00 to $10.50.

In the report, Stifel Nicolaus noted, “We are raising our 12-month price target from $9 to $10.50, which reflects our increased confidence in management's ability to execute; a multiple expansion across the EMS group (FY14 PE of 11x now vs. 9x at the beginning of the year); and the launch of Google Motorola X (which should add about $2bn in sales in the next two quarters). After several quarters of operational errors, we believe FLEX is showing signs that recent improvements in the business are more sustainable and should see margin expansion in FY14 on new programs and continued cost-cutting actions (particularly in its unprofitable Multek PCB business). That, combined with the recently approved share repurchase program for up to 10% of shares outstanding, could result in $1.10-$1.15 in FY15 earnings; but at this point we maintain our FY15 EPS estimate of $1.05. Our new price target of $10.50 is based on 10x our existing FY15 EPS estimate, and we note that this is still below the peer average of 11x.”

Flexotronics closed on Monday at $9.00.