Plexus stock price target lowered to $158 by Needham on mixed outlook

Investing.com - Needham has lowered its price target on Plexus (NASDAQ:PLXS) to $158.00 from $162.00 while maintaining a Buy rating on the stock. The adjustment comes as the stock has declined 12.2% in the past week, though InvestingPro data shows Plexus maintains a perfect Piotroski Score of 9, indicating strong financial health.

Plexus delivered in-line fiscal third-quarter revenues with earnings per share benefiting from gross and operating margins at the upper end of expectations, along with lower interest expense and a favorable tax rate. The company’s free cash flow was better than expected, and Plexus is on track to generate strong free cash flow in the fiscal fourth quarter. InvestingPro analysis reveals an impressive free cash flow yield of 11% and a PEG ratio of 0.41, suggesting attractive valuation relative to growth potential.

The company’s top-line performance was driven by quarter-over-quarter growth in the Industrial and Aerospace & Defense markets, partially offset by slightly slower growth in Health Care/Life Sciences. Revenues rose 6% year-over-year, in line with consensus, while non-GAAP earnings per share came in 11% above consensus.

For the fiscal fourth quarter, Plexus expects revenue at the midpoint of its guidance range to be down 0.5% year-over-year compared to Street expectations of 3% growth, while the earnings per share guidance met consensus.

Needham noted that demand across Plexus’s key verticals—health care, Aerospace & Defense, and industrial/semiconductor capital equipment—is on a good footing looking ahead to fiscal 2026, leading the firm to increase its fiscal fourth-quarter and fiscal 2026 earnings per share estimates.

In other recent news, Plexus reported its fiscal third-quarter 2025 earnings, revealing an earnings per share (EPS) of $1.90, which surpassed analyst expectations of $1.71. The company’s revenue for the quarter came in at $1.018 billion, slightly below the anticipated $1.02 billion. This earnings beat was largely due to lower interest expenses and a favorable tax adjustment. Despite this performance, revenue concerns remain a topic of discussion among investors. Raymond (NSE:RYMD) James has reiterated its Outperform rating for Plexus, setting a price target of $165. Meanwhile, Stifel lowered its price target to $140 from $145, maintaining a Hold rating due to a mixed outlook. These developments highlight the varying perspectives among analysts regarding Plexus’s future performance. The company’s disciplined approach to capital returns and shareholder value continues to be a focus amid ongoing macroeconomic challenges.

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