Tuesday, Credit Suisse upgraded Plexus Corp. (PLXS) shares to Outperform from Neutral and increased its price target to $42 from $27.
Analyst Stein upgraded the stock despite the big run recently. The dramatic revenue & EPS upside that PLXS guided for fiscal second quarter reflects a combination of improving demand, new program win traction, and financial execution that causes us to lift the analyst's 2010 and 2011 estimates by >20%.
The analyst's new price target of $42 is based on 16x his new calendar 2011 EPS estimate of $2.66. This suggests >20% upside from current levels. Two points of conservatism are banked in: the analyst model nothing from KO, which could add ~10% upside to his estimates and price target, and traditional multiple range for PLXS is 14-21x, modestly above his 16x.
The analyst noted that in fiscal first quarter, the wire-line and medical segments, gross and operating margins, and working capital all exceeded his expectations. Fiscal second quarter guidance suggests all end markets will be up quarter-over-quarter, all well above normal seasonality, with wire-less and medical expected to do best, up 20%-30% quarter-over-quarter.
ROIC exceeded 17% by the analyst's calculation, which stands out relative to some other EMS companies because the denominator (NOPAT) is very high quality owing to PLXS not backing out amortization or stock compensation, and the denominator (invested capital) is likewise high-quality because the company has not had any noteworthy asset write-downs in the last 10 years. The Wireless infrastructure end market was down 8% quarter-over-quarter in fiscal fourth quarter. Defense/Aerospace was the other weak end market in the quarter, dropping 13% quarter-over-quarter in the last quarter.
Currently, PLXS is up $1.02 or 2.96% and trading at $35.28.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.