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Investing.com - Flex Ltd. (NASDAQ:FLEX) and Plexus Corp . (NASDAQ:PLXS) shares are trading sharply lower Thursday following their latest earnings reports, with Raymond (NSE:RYMD) James providing analysis on the broader IT supply chain sector. The sector’s volatility has investors seeking deeper insights into company fundamentals, which InvestingPro provides through comprehensive financial health scores and advanced metrics.
Flex shares dropped 6-7% despite the company maintaining its fiscal year 2026 outlook for cloud and power revenue at approximately $6.5 billion, representing 35% year-over-year growth. Raymond James analysts believe that 2-3 turns of Flex’s recent multiple expansion are tied to its AI datacenter business.
Jabil Inc. (NYSE:JBL) stock fell approximately 6% in sympathy, though Raymond James notes that Jabil raised its full-year guidance after its May quarter, with AI-related business now expected to reach $8.5 billion in fiscal year 2025. The firm suggests that Jabil’s previous upside may have created expectations for Flex that weren’t met.
Plexus shares experienced the steepest decline, falling 12-13%, which Raymond James characterized as making "no sense" given the company’s lack of AI or automotive exposure. The firm noted that Plexus’s guidance was only slightly below expectations but still assumes quarter-over-quarter growth.
Tesla’s (NASDAQ:TSLA) incrementally weaker report and STMicroelectronics’ (NYSE:STM) overnight results also contributed to the negative sentiment across the IT supply chain sector, though Raymond James believes Jabil has already adequately accounted for any weakness in its Tesla business. Despite market reaction, STM maintains strong fundamentals with a healthy current ratio of 3.05 and a 27-year track record of consistent dividend payments. InvestingPro analysis suggests STM is currently undervalued, with 10 additional ProTips available for subscribers looking to make informed investment decisions.
In other recent news, STMicroelectronics has been the subject of multiple analyst updates and projections. Baird upgraded STMicroelectronics from Neutral to Outperform, citing a recovery in the semiconductor cycle and an expected expansion in gross margins. This upgrade came with a significant increase in the price target to $50.00. Meanwhile, TD Cowen raised its price target to $30.00 while maintaining a Hold rating, following discussions with the company’s Investor Relations representative. BofA Securities made two adjustments, first lowering its price target to $27.00, and later to $25.00, yet kept a Neutral rating. Despite these adjustments, BofA analysts increased their earnings per share estimates for 2025 and 2026, reflecting positive remarks from the company’s CEO about future trends. STMicroelectronics management expressed optimism, anticipating a 7.7% increase in second-quarter sales and signs of recovery in the industrial sector. However, challenges remain, as the automotive sector’s demand has not met expectations. Additionally, management foresees a year-over-year decline for the fiscal year 2025.
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