Goldman Sachs Adds Flextronics (FLEX) to Conviction Buy List

(Updated - October 5, 2016 8:35 AM EDT)

Goldman Sachs upgraded Flextronics (NASDAQ: FLEX) from Buy to Conviction Buy with a price target of $16, implying upside of 17%. Analyst Mark Delaney highlighted attractive valuation and benefits from entry into new markets.

Delaney explained, "As part of a rebalancing of the broader TMT portfolio, we add FLEX to the Conviction List as we believe it is positioned to benefit from entry into new markets and valuation looks attractive. We see 17% upside (vs. 0% average for our coverage) to our 12-month target. Key reasons for our view: 1) New markets: FLEX could nearly double its TAM in soft goods manufacturing in the long term, and it has a new partnership to make shoes for Nike. Nike could develop into a top customer and also help expand margins; 2) Mix and diversification: FLEX has improving mix and no 10%+ customers; 3) Valuation: FLEX trades at an 8% FCF yield and a ~5% P/E discount to peers."

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

Shares of Flextronics closed at $13.62 yesterday.

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