Collins Stewart Upgrades Fabrinet (FN) to Buy; Flooding Subsiding

Collins Stewart upgraded Fabrinet (NYSE: FN) to Buy with a price target of $18.00.

Collins analyst says, "Our Call: the recent turmoil and disaster caused by flooding in Thailand is slowly coming to an end. We look for FN to show material progress in recovering by YE, thus given the price break we raise our investment rating to Buy from Neutral. Fabrinet did suffer material damage at its Chokchai site (227k sq ft, 27% of Thai manufacturing, 22% of worldwide) due to flooding. However, its main facility, Pinehurst, (605k sq ft, 73% of Thai space & 56% WW), was not hit. Including its plant in China, FN has 1,080k sq ft of space. A new 330k sq ft plant at Pinehurst, was originally scheduled to open in mid-December. That date has been delayed a few weeks as construction was halted during the flooding but the building was not damaged. This brand new site will now be instrumental in re-ramping customers & business. Fabrinet’s FY11A (June) EPS was $1.99. Post re-ramp, we would expect an annualized range of $1.60-$2.00."

For more ratings news on Fabrinet click here and for the rating history of Fabrinet click here.

Shares of Fabrinet closed at $13.53 yesterday.

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