JPMorgan Adds Fabrinet To Focus List After Stock's 30% Decline

The valuation of Fabrinet FN led JPMorgan to add the tech manufacturer to the firm's focus list Thursday.

JPMorgan has an Overweight on Fabrinet and raised their price target on the stock from $55 to $57. “We believe the recent sell-off (down 28 percent since Feb. 21 peak/S&P up 2 percent) presents an attractive GARP entry point. We are buyers here," analyst Paul Costersaid in a note.

Why A Top Pick?

100G deployments in North America have been driving growth for optical components, and Chinese demand is set to pick up soon, Coster said. Fabrinet is likely to benefit from this upgrade cycle, the analyst said. Fabrinet's operating leverage should increase “as opex grows slower than revenues with management indicating capacity for improvement driven by scale and as new facilities begin to ramp," according to the JPMorgan note.

Fabrinet has developed a larger footprint with their campus in Santa Clara and with Exception EMS in the UK. These locations provide “turnkey solutions and prototypes getting in early during the design cycle," Coster said.

Fabrinet Chief Financial Officer Toh-Seng Ng had a positive tone at JPMorgan’s TMT conference, according to the firm's note.

Fabrinet was trading up 4.6 percent late Thursday morning.
Related Links:

Mid-Morning Market Update: Markets Edge Higher; Dollar General Tops Q1 Expectations

5 Biggest Price Target Changes For Thursday

Posted In: fabrinetJPMorganPaul CosterToh-Seng NgAnalyst ColorLong IdeasNewsPrice TargetAnalyst RatingsMoversTechTrading Ideas

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.