B.Riley FBR Sticks to Its Hold Rating for Fabrinet (FN)


B.Riley FBR analyst Dave Kang maintained a Hold rating on Fabrinet (FN) today and set a price target of $54. The company’s shares closed last Monday at $56.46.

Kang wrote:

“Driven by the strength in Fabrinet’s (FN) F4Q sales/EPS of $405.1M/$1.00 were above consensus of $400M/$0.94. Within Opcomm, Telecom revenue decreased 1% Q/ Q while Datacom increased 5% Q/Q. The decline in Telecom was mainly due to the impact from the Huawei ban (approximately $9M). Non-Opcomm revenue increased 4% Q/Q. One of the highlights was that the company has completed the transition of INFN’s (Buy) Coriant production from Germany to its own Thailand facility; the company expects INFN to ramp in F1Q and eventually become a 10% customer by late FY20. In F4Q, GM decreased to 11.8% from 12.1% in F3Q, mainly due to production inefficiencies as a result of the Huawei ban. The company provided F1Q sales/EPS outlook of $386M-$394M/$0.80-$0.84, compared to consensus of $407M/$0.96.”

According to TipRanks.com, Kang is a 5-star analyst with an average return of 19.3% and a 63.0% success rate. Kang covers the Consumer Goods sector, focusing on stocks such as DASAN Zhone Solutions Inc, Applied Optoelectronics, and Acacia Communications.

Fabrinet has an analyst consensus of Moderate Buy, with a price target consensus of $57.80, implying a 3.0% upside from current levels. In a report released today, Northland Securities also maintained a Hold rating on the stock with a $44 price target.

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The company has a one-year high of $62.31 and a one-year low of $40.94. Currently, Fabrinet has an average volume of 362.9K.

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Fabrinet engages in the provision of optical packaging and electronic manufacturing services to original equipment manufacturers. The firm’s engineering services include process design, failure analysis, reliability testing, tooling design, and real-time traceability system.

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