B. Riley lowered its price target on Fabrinet to $364 from $385 and maintained a Neutral rating. The firm said its revised valuation reflects recent multiple compression among AI-related optical stocks.
The change followed Fabrinet’s fiscal first-quarter results, which topped analyst estimates. The company reported sales of $1.475 billion and earnings of $4.34 per share, compared with consensus forecasts of $1.404 billion and $4.19. Revenue increased 51% year over year.
Data Center revenue rose 16% from the previous quarter to $777 million, led by transceivers. Communications Infrastructure revenue increased 8% to $444 million, while Automotive, Industrial and Other revenue also grew 8%, reaching $253 million.
Fabrinet forecast second-quarter sales of $1.60 billion to $1.65 billion and earnings per share of $4.77 to $4.92. Both ranges are above consensus estimates of $1.479 billion in sales and $4.43 per share. The company expects to complete Building 10 by January before starting work on Building 11.
B. Riley raised its adjusted EBITDA estimates for fiscal 2027 and fiscal 2028 to $811 million and $955 million, respectively, from $747 million and $867 million. Its new price target applies a multiple of 13 times its fiscal 2028 adjusted EBITDA estimate, plus net cash, compared with 15 times previously.
Sources: Investing.com News.