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Investing.com - Jefferies has initiated coverage on Fujikura Ltd (TYO:5803) with a Buy rating and a price target of JPY14,059.00.
The research firm expects Fujikura’s earnings momentum to continue until FY3/27, primarily driven by strong demand from hyperscalers in the data center sector.
Optical Communications will be the crucial earnings driver for Fujikura, though Jefferies notes that upside potential is relatively limited compared to Furukawa due to Fujikura’s recently surging share prices.
Jefferies anticipates Fujikura will raise its payout ratio from 30% to 40%, following company guidance, which would increase shareholder returns.
The firm also projects that Fujikura’s FY3/26 earnings will exceed the company’s guidance, which was already revised upward in the first quarter.
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