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Investing.com - KeyBanc Capital Markets raised its price target on Flextronics (NASDAQ:FLEX) to $75.00 from $70.00 on Thursday, while maintaining an Overweight rating on the stock. The new target represents potential upside from FLEX’s current price of $66.03, which is trading just 1% below its 52-week high of $67 after an impressive 72% gain year-to-date.
The price target increase follows Flextronics’ fiscal second-quarter earnings report, which initially triggered a negative market reaction before shares recovered later in the trading session.
KeyBanc cited the company’s data center strategy as a key growth driver that is positively impacting both revenue expansion and profit margins, which the firm expects will "continue to dominate the story" for Flextronics. InvestingPro data shows the company operates with relatively weak gross profit margins of 8.94%, making strategic growth initiatives particularly important.
The investment bank noted some investor hesitation may have stemmed from Flextronics’ reluctance to update its outlook for the data center and power segments, though the subsequent share price recovery suggested investors ultimately responded favorably to management’s optimistic commentary about the second half of fiscal 2026 and first half of fiscal 2027.
KeyBanc maintained its bullish stance on Flextronics as management continues efforts to "structurally improve the core EMS business over time through portfolio optimization," while also observing strength in the medical segment and stabilization in previously weak areas. According to InvestingPro, management has been aggressively buying back shares, and the company currently trades at a P/E ratio of 24.6, which is high relative to its near-term earnings growth. Discover 12 more exclusive ProTips and comprehensive analysis in FLEX’s Pro Research Report, available with an InvestingPro subscription.
In other recent news, Flex Ltd. has reported its second-quarter earnings for fiscal year 2026, exceeding analyst expectations. The company achieved an adjusted earnings per share (EPS) of $0.79, outperforming the projected $0.75. Flex also reported revenue figures of $6.8 billion, surpassing the anticipated $6.68 billion. Despite this strong financial performance, the company’s stock experienced a decline, which analysts attribute to broader market conditions and potential future challenges. These developments highlight Flex’s financial resilience amid a complex market environment. The earnings results have drawn attention from various investment analysts, though specific upgrades or downgrades were not reported. Investors are closely monitoring these recent developments to gauge the company’s future performance.
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