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Summary

  • As Fabrinet released its financial results for Q3 FY23, brokers revised their ratings on the stock.
  • The consensus price target on the FN stock is US$ 122 as on May 24, 2023.
  • Northland Securities upgraded its rating on Fabrinet to “Outperform” a day after the release of its financial results.

Brokers revised their ratings on Fabrinet after the release of the company’s financial results for Q3 FY23. Fabrinet announced that its results for the quarter ended March 31, 2023, exceeded its guidance.

Fabrinet operates in the manufacturing industry, and it fulfils specific manufacturing needs of original equipment manufacturers. Since these clients operate in complex industries, they require specialized manufacturing capabilities.

Fabrinet’s net revenue for the three months ended March 31, 2023, was US$ 665.3 million, compared to US$ 564.4 million in Q3 FY22. Analysts have revised their ratings and target price on Fabrinet. As on May 24, 2023, Fabrinet stock had a consensus price target of US$ 122.

2023, Fabrinett EODHD/Others

FN shares closed at US$ 93.8 on May 23, 2023. In early 2023, Fabrinet hit its 52-week high of US$ 140.18 on January 17, 2023.

What analysts are saying

Lake Street Capital retained its ‘Buy’ rating on Fabrinet on May 9, 2023, a day after the company released its financial results. The broker’s price target on FN also remained unchanged at US$ 130, which is 32.19% higher than its closing price on May 23, 2023.

Northland Securities upgraded its rating on Fabrinet to ‘Outperform’ on May 9, 2023. However, Northland lowered its price target on the FN stock to US$ 135, which is still 37.28% higher than its previous close of US$ 93.8.

Alternatively, B Riley and Needham Securities downgraded their ratings on the stock to “Neutral” and “Buy”, respectively, after the Q3 result announcement. B Riley Securities also lowered its price target on the stock to US$ 103, which marks an upside potential of 4.74%.

Image source: ©2023 Kalkine®; Data source: EODHD/Others

Overall, Fabrinet stock has a mean recommendation rating of 2.2 on a scale of one to five. Here, one represents “Strong Buy” and five represents “Strong Sell”. Out of five analysts, four have given the stock a “Buy” rating, one has given the stock a “Hold” rating and none have given it “Strong Buy”, “Sell” or “Strong Sell” ratings.

Fabrinet’s Q3 results and Q4 guidance

For the three months ended March 31, 2023, Fabrinet’s revenue was US$ 665.3 million, and its net income was US$ US$ 59.4 million, compared to US$ 50.7 million in the third quarter of 2022. The cash and cash equivalents for the quarter were US$ 230.74 million.

Fabrinet reported basic earnings per share of US$ 1.62 in Q3 FY23. Based on these results, Fabrinet expects revenue in the fourth quarter to be in the range of US$ 630 million to US$ 650 million. Additionally, the guidance for the net income per diluted share is in the range of US$ 1.57 to US$ 1.64.