Piper Jaffray Raises Price Target on Fabrinet (FN) to $36 Following OFC

Piper Jaffray reiterated an Overweight rating on Fabrinet (NYSE: FN), and raised the price target to $36.00 (from $33.00), following OFC. Piper Jaffray came away from OFC more confident that the 100G Datacom cycle is gaining significant traction, and is now modeling FQ3 revenues of $244.0M, which is $1.5 million higher than the Street and at the high-end of management's prior guidance ($240-244M). While datacom has been a big driver for FN over the past 4-5 quarters, the company is now anticipating telco demand will inflect and grow faster than datacom.

Analyst Troy Jensen commented, "Following OFC, we believe demand in China has remained strong throughout Q1 and the 100G datacom and Telco upgrade cycles should inflect in the second half of 2016. Due to Fabrinet’s strong positioning in both telco and datacom optics, we believe the company will outperform March quarter (FQ3) expectations and we are raising our near and longer term revenue and EPS estimates. In addition to our optimism regarding inflecting growth for datacom and Telco optics, we believe Fabrinet can grow faster than the overall optical market given a robust pipeline of new program initiatives with new and existing customers. Given our confidence in near term demand trends, we are reiterating our Overweight rating and increasing our price target from $33 to $36."

For an analyst ratings summary and ratings history on Fabrinet click here. For more ratings news on Fabrinet click here.

Shares of Fabrinet closed at $31.02 yesterday.

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