Fabrinet (FN) PT Lowered to $220 at Needham 'on the ongoing pressures in the Telecom Service Provider market'

Needham analyst Alex Henderson lowered the price target on Fabrinet (NYSE: FN) to $220.00 (from $230.00) while maintaining a Buy rating.

The analyst commented: "We are trimming our estimates for Fabrinet based on the ongoing pressures in the Telecom Service Provider market. We are also trimming our estimation for AI growth. The lowered AI growth forecast reflects our belief the sharp increase in performance at a substantially higher price per unit of the NVIDIA product line implies a slower growth rate in GPUs. When this is combined with price declines in the optics reflecting normal price deflation and lower component costs, our estimation of the Optics Revenue growth flattens more than our prior expectations. Our natural bias in forecasting is to be conservative. We think our new forecasts have built in conservative calibrations for the timing and slope of the Telecom recovery and leave room for upside in AI results. We believe our estimates are de-risked."

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