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Tuesday - Stifel analysts have initiated coverage on Flextronics (NASDAQ:FLEX) with a Buy rating and a price target of $52.00, representing potential upside from the current price of $43.02. According to InvestingPro data, FLEX is trading near its 52-week high of $45.10, with an impressive 61.43% return over the past year. The firm sees Flex International, LTD as well-positioned within the market as a long-standing Electronics Manufacturing Services (EMS) provider and anticipates the company will keep benefiting from its expansion into growth areas such as power and cooling.
Flex’s recent strategic acquisitions are a key part of Stifel’s positive outlook. The company’s purchase of JetCool, a business specializing in liquid cooling solutions for data center infrastructure, along with Crown Technical Systems, a firm focused on power distribution and protection solutions, are seen as moves that diversify Flex into attractive growth sectors. With a market capitalization of $16.48 billion and an overall financial health score rated as GOOD by InvestingPro, these strategic moves appear well-supported by the company’s solid foundation.
The analyst’s optimistic view is also supported by Flex’s increasing focus on U.S. hyperscaler opportunities, which is expected to drive further acceleration in top-line growth and margin expansion over the longer term. This strategy aligns with Stifel’s bullish stance on Flex’s competitor Celestica (NYSE:CLS), which also has a Buy rating from the firm.
In the most recent quarter, Flex reported a significant increase in its data center business, which saw a year-over-year growth of 45%. This performance is indicative of the company’s strong execution in a highly competitive sector and underscores the reasons for Stifel’s confidence in Flex’s ongoing and future success.
In other recent news, Flexsteel Industries, Inc. reported impressive second quarter results, exceeding analyst estimates with adjusted earnings per share of $0.95 and revenue of $108.5 million. The company’s strong performance was attributed to growth across core and new markets, marking the fifth consecutive quarter of year-over-year sales growth. In light of these results, Flexsteel raised its fiscal 2025 revenue guidance to a range of $435-445 million, surpassing analyst expectations.
The company also projects revenue between $110-115 million for the third quarter, slightly above the consensus estimate. Despite these positive developments, Flexsteel’s CEO Derek Schmidt indicated potential tariffs on imports from Mexico and Canada could introduce uncertainty, given the company’s significant operations in Mexico. Flexsteel ended the quarter with $11.8 million in cash and no outstanding borrowings on its credit line, having generated $6.7 million in cash from operations. These are among the recent developments for the company.
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