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Investing.com - Benchmark raised its price target on Plexus (NASDAQ:PLXS) to $165.00 from $160.00 on Monday, while maintaining a Buy rating on the electronic manufacturing services company. According to InvestingPro data, the company boasts a perfect Piotroski Score of 9 and maintains a "GOOD" overall financial health rating of 2.76 out of 5.
The research firm’s decision follows meetings with Plexus management that strengthened its confidence in the company’s growth trajectory and continued fundamental expansion. Trading at a P/E ratio of 23.8x with strong growth prospects, InvestingPro analysis indicates the stock is currently fairly valued. Benchmark noted that management believes approximately three-quarters of Plexus’ 9-12% growth outlook stems from its differentiated positioning, with the remainder attributed to improving market trends.
Plexus maintains a balanced business mix across Healthcare & Life Sciences, Aerospace & Defense, and Industrial/Semi Cap Equipment sectors. This positioning enables the company to enter fiscal year 2026 with strong top-line momentum and meaningful operating leverage to sustain operating margins above 6%.
The company is implementing multiple technology integration initiatives spanning automation, AI robotics, and advanced data analytics to drive efficiency gains. Benchmark believes these efforts could help Plexus achieve a record quarterly operating margin, potentially approaching 6.5%.
Despite an uncertain macroeconomic environment, Benchmark observed that Plexus is executing well and driving healthy fundamental expansion that should continue to deliver outperformance throughout the business cycle.
In other recent news, Plexus reported its fiscal third-quarter 2025 earnings, with earnings per share (EPS) reaching $1.90, exceeding the consensus estimate of $1.71. The company achieved in-line sales of $1.018 billion, although this was slightly below the forecast of $1.02 billion. The earnings beat was attributed to lower interest expenses and a favorable tax adjustment. Despite these results, Plexus’s stock price target was adjusted by several analysts. Needham lowered its target to $158 while maintaining a Buy rating, and Stifel reduced its target to $140, keeping a Hold rating. Meanwhile, Raymond James reiterated an Outperform rating with a price target of $165, noting Plexus’s disciplined approach to capital returns amid macroeconomic challenges. The company’s free cash flow was better than expected, and it is on track for strong cash flow in the upcoming quarter. These developments reflect the mixed outlook and ongoing investor concerns over revenue and growth prospects.
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