Plexus Corp (NASDAQ: NASDAQ:PLXS) has received a sustained vote of confidence from a Benchmark analyst who maintained a Buy rating and a $150.00 price target on the company's shares.
The analyst's endorsement comes as Plexus gears up to release its third-quarter earnings results on October 23, 2024, after the market closes, with a conference call to follow the next morning.
The analyst's outlook remains positive regarding Plexus' share gains and the momentum of the new program ramps. However, near-term revenue estimates have been slightly adjusted to account for the ongoing production stop at Boeing (NYSE:BA), which has affected suppliers like Plexus. The Boeing strike, which began late in the previous quarter, is expected to have a minimal impact on Plexus' fourth-quarter results.
Despite the strike at Boeing now entering its sixth week, with an additional three to four weeks anticipated before production returns to pre-strike levels, the analyst anticipates that the guidance for the December quarter will likely reflect the impact of reduced business from Boeing. Nonetheless, the introduction of new programs in the Space and Semiconductor Capital Equipment sectors is projected to help mitigate the short-term revenue effects.
In other recent news, Plexus Corp has seen a flurry of positive developments. The company's fiscal third quarter of 2024 financial results exceeded expectations, with reported revenues of $961 million and a robust $114 million in free cash flow. Additionally, Plexus Corp announced a new $50 million stock buyback plan, set to begin following the conclusion of its current initiative.
Benchmark, a financial advisory firm, has raised its price target for Plexus Corp to $150 from $145, maintaining a "Buy" rating on the stock. This decision comes as Plexus demonstrates resilience in the face of challenges such as the Boeing strike and potential work stoppages by East coast Longshoremen. Benchmark analysts suggest that Plexus's "in-country-for-country" manufacturing strategy and focus on higher-value product manufacturing will help it weather market pressures.
In the healthcare life sciences sector, Plexus Corp has secured over $500 million in contracts over the past four quarters, contributing to a growing funnel of qualified manufacturing opportunities worth $3.6 billion. Despite slower growth in the aerospace and defense sector due to supply constraints and customer design changes, the company anticipates a mid-single-digit revenue increase in the fiscal fourth quarter.
InvestingPro Insights
Plexus Corp's (NASDAQ:PLXS) financial metrics and market performance align with the analyst's positive outlook. According to InvestingPro data, the company's stock has shown impressive returns, with a 53.02% price total return over the past year and a strong 48.2% return in the last six months. This performance supports the analyst's Buy rating and suggests investor confidence in Plexus' growth trajectory.
The company's ability to navigate challenges, as mentioned in the article, is reflected in its financial health. InvestingPro Tips indicate that Plexus operates with a moderate level of debt and has been profitable over the last twelve months. These factors could provide the company with financial flexibility to manage temporary setbacks like the Boeing production halt.
While the article discusses potential near-term revenue impacts, it's worth noting that Plexus' revenue for the last twelve months stands at $3,934.2 million USD. The company's P/E ratio of 34.34 suggests that investors are willing to pay a premium for its shares, possibly due to expectations of future growth.
For readers interested in a more comprehensive analysis, InvestingPro offers 12 additional tips for Plexus Corp, providing deeper insights into the company's financial position and market outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.