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On Tuesday, analysts at KeyBanc increased the price target for Flextronics stock (NASDAQ: FLEX) to $50 from the previous $44, while maintaining an Overweight rating. The new target represents potential upside from the current trading price of $42.38, with the stock trading near its 52-week high of $45.10. This adjustment follows recent meetings with the company where discussions highlighted Flextronics’ strategic initiatives in the data center sector.
Flextronics has been focusing on a "grid-to-chip" strategy, which has contributed to the development of a distinct data center business. This strategy leverages the company’s core electronic manufacturing services (EMS) cloud compute capabilities. The firm is accelerating deployment at scale through vertical integration, utilizing proprietary intellectual property for power products. As a prominent player in the Electronic Equipment, Instruments & Components industry with a market capitalization of $15.82 billion, Flextronics has demonstrated strong momentum with a 27.8% return over the past year. For deeper insights into Flextronics’ performance metrics and growth potential, InvestingPro offers comprehensive analysis in its Pro Research Report.
For the fiscal year 2025, Flextronics reported approximately $4.8 billion in data center sales, marking a 50% year-over-year increase. The company has projected a mid-30% growth rate for the fiscal year 2026 in this segment. This growth is attributed to both organic and inorganic investments in the data center business.
The analysts at KeyBanc expressed optimism about Flextronics’ ongoing transformation efforts, which aim to shift the company’s portfolio towards higher growth and higher margin opportunities. They noted that while determining the appropriate valuation multiple for Flextronics is challenging, the data center theme is expected to remain significant for investors. According to InvestingPro analysis, the stock appears slightly overvalued at current levels, with additional insights available through InvestingPro’s Fair Value model and 12 exclusive ProTips.
Flextronics’ management team is recognized for its efforts to drive shareholder value through strategic business adjustments and investments in the data center sector.
In other recent news, Flex (NASDAQ:FLEX) Ltd has reported its fourth-quarter earnings for 2025, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $0.73, exceeding the forecast of $0.70, and reported revenue of $6.4 billion, above the anticipated $6.24 billion. Despite these positive results, Flex’s stock experienced a decline, reflecting broader market concerns. Flex’s data center revenue saw a significant increase of approximately 50% year-over-year, contributing to the company’s robust performance. In a strategic move to meet rising demand for AI-driven data center power solutions, Flex expanded its European operations by acquiring a new manufacturing site in Poland, doubling its power product capacity in the region. The company has also broadened its product portfolio through acquisitions, including Crown Technical Systems and JetCool Technologies. Additionally, Flex has set a revenue target of $25 to $26.8 billion for FY 2026, with expectations of a 30% growth in data center revenue. Analyst firms have noted Flex’s strong operational efficiency, with record gross and operating margins achieved during the year.
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