On Friday, Benchmark raised the price target for Plexus Corp (NASDAQ: NASDAQ:PLXS) shares to $120 from the previous $110, while maintaining a "Buy" rating on the stock. The adjustment follows a site visit by the firm to Plexus' Wisconsin operations, which has bolstered confidence in the company's financial trajectory.
During the visit to Plexus' manufacturing facilities, design center, and headquarters, investors had the opportunity to engage with CEO Todd Kelsey and COO Oliver Mihm. The analyst noted the standout features of Plexus' operations, highlighting the complexity of their products, technological innovation, and a corporate culture focused on quality, customer success, and sustainability.
Plexus is reportedly nearing the end of its inventory digestion phase and anticipates a return to upper single-digit growth even within the current environment of lukewarm demand. The firm's outlook is further buoyed by the potential for improved growth should macroeconomic conditions become more favorable.
The company's recent success in winning new programs and gaining market share is expected to continue supporting growth opportunities both in the near term and going forward. These factors have contributed to the analyst's decision to raise the price target, signaling a positive outlook for Plexus' financial performance.
In other recent news, Plexus Corp. has reported a prosperous fiscal second quarter for 2024, marked by significant new program wins and a promising revenue growth forecast.
The company announced $255 million in new program wins, contributing to an anticipated 9% to 12% revenue compound annual growth rate (CAGR) in the upcoming years.
In addition, Plexus Corp. expects to reach a 5.5% GAAP operating margin by fiscal 2025 and generated $65 million in free cash flow in the second quarter. For the third quarter, the company anticipates revenues of $960 million to $1 billion and a non-GAAP operating margin between 5.2% and 5.6%.
In light of these recent developments, Plexus Corp. has also emphasized its commitment to sustainability, with an annual sustainability report set to be released soon.
Despite some decreases in qualified manufacturing opportunities and muted outlooks in certain sectors, the company has seen strong performance in the Healthcare/Life Sciences sector and robust demand in the Americas. These are among the recent highlights for Plexus Corp., as reported in past articles.
InvestingPro Insights
In light of Benchmark's recent price target increase for Plexus Corp (NASDAQ: PLXS), real-time data from InvestingPro provides additional context for investors considering the stock. Plexus currently holds a market capitalization of $2.81 billion and trades with a price-to-earnings (P/E) ratio of 27.6, which adjusts to 21.43 when looking at the last twelve months as of Q2 2024. Despite a decline in revenue growth by -6.44% over the same period, the company remains profitable with a gross profit of $366.56 million and an operating income margin of 4.85%.
InvestingPro Tips highlight that Plexus is expected to be profitable this year, corroborating the positive sentiment from Benchmark's site visit. Analysts have revised their earnings upwards for the upcoming period, suggesting confidence in the company's financial outlook. Additionally, Plexus is noted for its low price volatility, which may appeal to investors seeking stability. It's important to note that while the company does not pay dividends, it has been profitable over the last twelve months.
For those interested in a deeper dive into Plexus Corp's financial health and future prospects, InvestingPro offers additional tips. Investors can use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these insights.
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