Archer Aviation reports manufacturing ramp with six aircraft in production
Investing.com - BofA Securities raised its price target on Sanmina-SCI Corp . (NASDAQ:SANM) to $120.00 from $100.00 while maintaining a Neutral rating on the stock. The electronic equipment manufacturer, currently valued at $5.65 billion, has seen its stock surge 52.84% over the past year, though InvestingPro analysis suggests the stock is slightly overvalued at current levels.
The price target increase follows Sanmina’s May announcement of its intention to acquire the data center infrastructure manufacturing business of ZT systems from AMD (NASDAQ:AMD), a move BofA Securities describes as strategic. With a healthy current ratio of 1.96 and trading near its 52-week high, Sanmina appears well-positioned for this acquisition. Discover more insights with InvestingPro, which offers 18 additional investment tips for Sanmina.
BofA Securities notes the acquisition will increase Sanmina’s scale and revenue from cloud and AI sectors, while providing the capability for full-system assembly for data center racks to complement Sanmina’s existing capabilities in metal bending, rack fabrication, cabling and PCBAs.
The acquisition is expected to close by the end of this calendar year, according to the research firm’s analysis.
BofA Securities maintains its Neutral rating on Sanmina stock, citing that positive factors such as the communications end market emerging from an inventory correction are balanced by ongoing weak macro conditions, a challenging operating environment, and the need for program ramps to materialize and reach scale in the fiscal second half.
In other recent news, Sanmina Corporation reported better-than-expected second-quarter earnings and revenue. The company posted adjusted earnings per share of $1.41, surpassing the consensus forecast of $1.38. Revenue reached $1.98 billion, slightly above the expected $1.96 billion and marking an 8.1% increase year-over-year. Despite these positive results, Sanmina’s guidance for the third quarter fell short of analyst estimates. The company anticipates adjusted earnings per share between $1.35 and $1.45, compared to the $1.53 projected by analysts. Revenue guidance of $1.925 billion to $2.025 billion also did not meet the consensus estimate of $2.066 billion. Sanmina generated $157 million in cash flow from operations and $126 million in free cash flow during the second quarter. The company also repurchased 1.03 million shares for $84 million.
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