NEW YORK (AP) -- Shares of Fabrinet jumped Thursday after a Stifel Nicolaus analyst upgraded the shares, saying demand from the company's key markets should continue to improve.
THE SPARK: Analyst Patrick Newton raised his rating on the shares to "Buy" from "Hold" and set a price target of $20. Fabrinet assembles optical, electro-mechanical and electronic devices for other companies, and Newton thinks the company will benefit from greater demand from the optical communication and commercial laser markets over the next few quarters.
THE BIG PICTURE: In August, Fabrinet said it turned a profit in its latest fiscal year after taking a loss the previous year. Its annual revenue grew 14 percent to $641.5 million. The company expects to earn 31 to 33 cents per share on an adjusted basis in the first quarter on $158 million to $162 million in revenue.
Analysts expect Fabrinet to report adjusted net income of 33 cents per share on $161 million in revenue in the first quarter, which ends in September.
Newton thinks the company will post net income of $1.49 per share on $691 million in revenue in the new fiscal year. FactSet says analyst expect adjusted net income of $1.47 per share and $674.6 million in revenue on average.
SHARE ACTION: Fabrinet shares gained $1.51, or 10.2 percent, to $16.30 in afternoon trading.
