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Investing.com - KeyBanc has raised its price target on Flextronics (NASDAQ:FLEX) to $60.00 from $50.00 while maintaining an Overweight rating on the stock. The company, currently trading near its 52-week high of $50.62 with a market capitalization of $18.49 billion, has shown impressive momentum with a 64.54% return over the past year.
The investment firm cited Flextronics’ differentiated data center strategy as a key factor in the decision, noting that the company covers more of the product-and-service total addressable market with its suite of power products built on proprietary intellectual property. According to InvestingPro, Flex has demonstrated strong financial health and maintains a solid market position, with 12 additional exclusive insights available to subscribers.
KeyBanc pointed out that Flextronics has achieved superior gross margin expansion compared to peers, yet trades at a discount to other data center and AI-exposed competitors at 16.5 times earnings versus an average of 18.9 times. The company currently trades at a P/E ratio of 22.56x, with investors eagerly awaiting the next earnings report scheduled for July 23, 2025.
The firm acknowledged that Flextronics’ large core end markets of automotive, consumer electronics, and healthcare remain subdued with few clear signs of near-term improvement, but noted that current Street expectations already account for this weakness.
KeyBanc also highlighted that Flextronics and much of the industry have advantageously positioned themselves in strong data center growth trends and have become more disciplined and focused on margins and returns, resulting in the U.S.-listed electronic manufacturing services industry trading at higher valuations.
In other recent news, Flex Ltd. reported its fourth-quarter earnings for 2025, surpassing Wall Street expectations with an earnings per share (EPS) of $0.73 compared to the forecasted $0.70. The company achieved revenue of $6.4 billion, exceeding the anticipated $6.24 billion, marking a 4% increase year-over-year. Despite these positive results, Flex’s stock experienced a decline in pre-market trading, reflecting broader market sentiment. Flex also announced a significant expansion in its European operations through its Critical Power Business, Anord Mardix, by acquiring a new manufacturing site in Poland. This move is part of Flex’s strategy to invest in critical power and data center technologies, responding to rising demand for AI-driven data center power solutions.
Additionally, Flex’s outlook was upgraded to positive by Fitch Ratings, which maintained the company’s ’BBB-’ rating. This upgrade is attributed to Flex’s improved financial profile and profitability. Analysts at KeyBanc raised Flextronics’ stock price target to $50, citing strong growth in the data center sector. The company reported approximately $4.8 billion in data center sales for fiscal year 2025, a 50% increase year-over-year, and projects mid-30% growth for fiscal year 2026. Meanwhile, Nextracker Inc. added three energy sector veterans to its Board of Directors, enhancing its expertise in policy, regulation, and corporate governance as it scales its global operations.
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