Why Flextronics International Ltd. Shares Could Pop 25%

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Flextronics International Ltd. (NASDAQ: FLEX  ) popped 4% today after Needham & Company upgraded the contract electronics manufacturer from hold to buy.

So what: Along with the upgrade, analyst Sean K.F. Hannan planted a price target of $12.50 on the stock, representing about 30% worth of upside to yesterday's close. So while contrarian traders might be turned off by Flextronics' year-to-date price strength, Hannan's call could reflect a sense on Wall Street that its improvement prospects still aren't fully baked into the valuation.

Now what: According to Needham, Flextronics' risk/reward trade-off remains rather attractive at this point. "Considering FLEX's scale and what's historically been a less favorable mix model vs. more nimble peers, we came away impressed that positive multi-year mix shifts appear to be under way," said Hannan "Ultimately, we see the model improving on multiple fronts as another stage kicks in that should yield improved visibility, better margins and ultimately earnings growth." When you couple that upbeat outlook with Flextronics' single-digit forward P/E, it's tough to disagree with Needham's bullishness. 

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

 


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2968710, ~/Articles/ArticleHandler.aspx, 10/23/2014 11:57:18 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement