Street Calls of the Week
Investing.com - Benchmark has reiterated its Buy rating on Plexus (NASDAQ:PLXS) with a price target of $165.00, following the company’s quarterly performance that exceeded market expectations. According to InvestingPro data, Plexus stands out with a perfect Piotroski Score of 9, indicating strong financial health, while current analysis suggests the stock is slightly overvalued at its current trading level of $150.56.
Plexus reported revenue of $1.06 billion, surpassing consensus estimates of $1.04 billion, representing a 4% increase quarter-over-quarter and 1% year-over-year growth. The company posted earnings per share of $2.14, beating expectations by $0.27, which included approximately a $0.25 tax benefit for the first quarter. With a PEG ratio of 0.53, the stock is trading at an attractive valuation relative to its near-term earnings growth potential.
The company’s operating margin came in at 5.7%, slightly below guidance midpoint, reflecting ongoing investments in new technologies, efficiencies, and facilities. Benchmark noted these investments are temporarily limiting operating margin expansion but should deliver "healthy incremental margin improvement" in the second half of the year.
Strength in semiconductor capital equipment and energy demand late in the quarter drove the revenue upside, helping to offset a timing-related program delay in the aerospace and defense segment. Benchmark highlighted the company’s improving confidence in returning to its longer-term growth trajectory of 9-12%.
The research firm anticipates a second-half rebound to operating margins above 6% as Plexus begins to realize benefits from its efficiency and automation initiatives, alongside improved fixed cost leverage. InvestingPro reveals three analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s execution strategy. For deeper insights into Plexus’s financial health and growth prospects, including 10+ additional ProTips, subscribers can access the comprehensive Pro Research Report.
In other recent news, Plexus Corp. reported its fourth-quarter 2025 earnings, showcasing a strong performance with earnings per share (EPS) of $2.14, surpassing the analysts’ forecast of $1.87 by 14.44%. The company’s revenue was in line with expectations, coming in at $1.058 billion, which matched its guidance. Despite the earnings beat, the stock remained relatively stable, indicating that the market had already anticipated these results. Additionally, Sidoti downgraded Plexus from Buy to Neutral, citing macroeconomic uncertainties as a reason for the change. The firm maintained a price target of $150.00, describing Plexus’s quarterly performance as solid, with strengths in certain areas balancing out weaknesses. These recent developments provide investors with crucial insights into Plexus’s financial health and market positioning.
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