Fabrinet Stock Tumbles Pre-Market As Barclays Slashes Price Target Despite Q2 Earnings Beat: Retail Stays Bullish

The brokerage believes that the timeline for Fabrinet’s 1.6T transceivers for Nvidia’s Blackwell chips has been delayed, or at least there is “great uncertainty” about when the cycle will begin.

Shares of Fabrinet (FN) fell more than 7% in pre-market trade on Tuesday after analysts at Barclays lowered their price target for the stock.

According to TheFly, Barclays cited muted guidance for the third quarter as datacom revenue overshadowed Fabrinet’s beat-and-rise second-quarter performance.

It lowered Fabrinet stock’s price target to $245 from $292, implying an upside of 9% from current levels. 

The brokerage maintained an ‘Equal Weight’ rating on the stock.

Fabrinet reported second-quarter revenue of $833.6 million, ahead of consensus estimates of $813.5 million, according to data from Stocktwits. 

It reported earnings per share (EPS) of $2.61, beating the analysts’ forecasts of $2.49.

“By major product area, we anticipate datacom revenue to be down slightly sequentially in anticipation of the ramp in the coming quarters from next generation products,” Fabrinet said during the post-earnings conference call, offering guidance for the third quarter, according to TheFly.

The optical packaging services provider guided for revenue of $850 million to $870 million for the third quarter, compared to $731.5 million that it reported in the same period last year.

Barclays analysts believe that the timeline for Fabrinet’s 1.6-terabit transceivers for Nvidia Corp.’s (NVDA) Blackwell chips has been delayed, or at least there is “great uncertainty” about when the cycle will begin. This could impact the company’s revenue growth.

Retail sentiment on Stocktwits around the Fabrinet stock remained in the ‘extremely bullish’ (88/100) territory despite the reduction in price target. Message volume soared, showing an increase in retail internet.

Users expressed their optimism, with one user observing that the volume needs to “take off.”

Fabrinet’s stock price has gained nearly 15% over the past six months, but its one-year performance has seen sideways movement, with gains of just under 1%.

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