BofA lifts Flextronics stock price target to $48 on data center growth

Published 31/01/2025, 16:58
BofA lifts Flextronics stock price target to $48 on data center growth

For fiscal 2026, BofA Securities projects overall revenue growth for Flextronics to be in the low single digits year-over-year, reaching approximately $26.4 billion. This estimate takes into account the primary revenue growth driver being the data center business, while other business areas may see some decline. With a market capitalization of $16.34 billion and strong free cash flow yield, the company shows solid financial health. Bhattacharya emphasized that these projections could be conservative, with the potential for a faster recovery in end markets than currently expected. The analyst concluded by reiterating the Buy rating, citing long-term improvements in the company’s mix, portfolio optimization, margin growth, and capital returns. A comprehensive analysis of Flextronics’ financial health and growth prospects is available in the Pro Research Report on InvestingPro.

For fiscal 2026, BofA Securities projects overall revenue growth for Flextronics to be in the low single digits year-over-year, reaching approximately $26.4 billion. This estimate takes into account the primary revenue growth driver being the data center business, while other business areas may see some decline. With a market capitalization of $16.34 billion and strong free cash flow yield, the company shows solid financial health. Bhattacharya emphasized that these projections could be conservative, with the potential for a faster recovery in end markets than currently expected. The analyst concluded by reiterating the Buy rating, citing long-term improvements in the company’s mix, portfolio optimization, margin growth, and capital returns. A comprehensive analysis of Flextronics’ financial health and growth prospects is available in the Pro Research Report on InvestingPro.

The analyst’s outlook for Flextronics’ various market segments in fiscal 2026 is mixed. While the automotive and renewable energy sectors are expected to remain weak, there is anticipated growth in small form factor medical devices as the medical equipment market continues to stabilize through calendar year 2025. The Agility segment should benefit from compute, and networking is predicted to recover gradually throughout the year. However, the Lifestyle and Consumer Devices segment is likely to stay weak, with no significant signs of a market rebound in durable goods.

For fiscal 2026, BofA Securities projects overall revenue growth for Flextronics to be in the low single digits year-over-year, reaching approximately $26.4 billion. This estimate takes into account the primary revenue growth driver being the data center business, while other business areas may see some decline. With a market capitalization of $16.34 billion and strong free cash flow yield, the company shows solid financial health. Bhattacharya emphasized that these projections could be conservative, with the potential for a faster recovery in end markets than currently expected. The analyst concluded by reiterating the Buy rating, citing long-term improvements in the company’s mix, portfolio optimization, margin growth, and capital returns. A comprehensive analysis of Flextronics’ financial health and growth prospects is available in the Pro Research Report on InvestingPro.

In other recent news, Flex (NASDAQ:FLEX) Ltd. reported strong Q3 earnings and revenue, surpassing analyst expectations. The company posted adjusted earnings per share of $0.77, beating the consensus estimate of $0.63. Revenue was reported at $6.6 billion, exceeding analysts’ projections of $6.2 billion, and showing a 2.1% YoY increase. This impressive performance was attributed to margin expansion across all business units.

In the wake of these developments, Flex provided an optimistic outlook for the fourth quarter. The company expects adjusted EPS to be between $0.65 and $0.73, and revenue to range from $6.0 billion to $6.4 billion, both forecasts sitting comfortably above analyst expectations.

For the full fiscal year 2025, Flex has elevated its adjusted EPS outlook to $2.57-$2.65, marking an increase from its previous forecast. These recent developments underline a period of strong performance and positive expectations for Flex Ltd.

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