JPMorgan Raises Fabrinet's Price Target to $318 Amid Cloud Spending Optimism

JPMorgan has raised Fabrinet's (FN) price target from $235 to $318, maintaining a Neutral stance, due to anticipated gains in cloud-related expenditures. The firm cautions that other customer segments are showing sensitivity to economic conditions, indicating potential challenges. Despite concerns, Fabrinet's focus on cloud spending provides a strategic boost to its prospects. Investors are advised to monitor market drivers closely.

JPMorgan has revised its price target for Fabrinet (FN, Financial) from $235 to $318, maintaining a Neutral stance on the stock. This adjustment aligns with anticipated gains in the latter half of 2025 due to strong growth in cloud-related expenditures. However, the firm cautions that other customer segments are showing more sensitivity to broader economic conditions, indicating potential challenges ahead. Despite these concerns, the focus on cloud spending provides a strategic boost to Fabrinet's prospects. Investors are advised to monitor these market drivers closely.

Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for Fabrinet (FN, Financial) is $271.88 with a high estimate of $375.00 and a low estimate of $172.04. The average target implies a downside of 8.60% from the current price of $297.45. More detailed estimate data can be found on the Fabrinet (FN) Forecast page.

Based on the consensus recommendation from 10 brokerage firms, Fabrinet's (FN, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.

Based on GuruFocus estimates, the estimated GF Value for Fabrinet (FN, Financial) in one year is $241.99, suggesting a downside of 18.65% from the current price of $297.45. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Fabrinet (FN) Summary page.

Fabrinet (FN) Key Business Developments
Release Date: May 05, 2025
Positive Points
Fabrinet (FN, Financial) reported strong third-quarter revenue of $872 million, exceeding their guidance range. The company achieved a non-GAAP earnings per share of $2.52, also surpassing expectations. Telecom revenue grew significantly, up 42% year-over-year and 17% from the previous quarter. Automotive revenue saw substantial growth, increasing by 76% year-over-year and 24% from Q2. Fabrinet (FN) announced a new commercial relationship with Amazon Web Services, expected to boost revenue starting in fiscal year 2026.

Negative Points
Datacom revenue experienced a decline, down 18% year-over-year and 16% from Q2, due to product transitions at a large customer. Gross margin was impacted by a $4 million contra revenue from the Amazon warrant, reducing it by 40 basis points. The company anticipates some short-term margin headwinds due to new product ramps and startup costs. Sequential growth in non-optical communications is expected to moderate, particularly in the automotive segment. The 1.6T product ramp is still in its early stages, with the bulk of the ramp expected in the future.

References:
[1] https://www.gurufocus.com/news/2983587/jpmorgan-adjusts-price-target-for-fabrinet-fn-amid-cloud-spending-optimism-fn-stock-news
[2] https://www.gurufocus.com/news/2983579/coherent-cohr-price-target-raised-by-jpmorgan-amid-cloud-spending-optimism-cohr-stock-news