Bank of America sees more upside in store for this little-known beneficiary of reshoring trends and the Inflation Reduction Act. Analyst Ruplu Bhattacharya upped the bank’s price target on shares of Flex Ltd. to $31 from $28, citing its 15-year partnership to make microinverters for Enphase Energy . The analyst also highlighted the company’s long-term business mix and improving margins as contributing factors to the price hike. FLEX YTD mountain Shares in 2023 “FLEX should continue to benefit from the Inflation Reduction Act (IRA) which can help spur demand for clean energy and reshoring manufacturing back to the US. Inverters are included in FLEX’s core renewables business which is part of its industrial segment,” he wrote in a Friday note to clients. The price hike reflects nearly 13% upside from Friday’s close. Shares have added more than 28% since the start of the year. Strength within Flex’s automotive, health care and industrial businesses, along with improving margins within within its reliability segment, should drive mostly in-line results for the fiscal first quarter of 2024, according to the analyst. He also sees an opportunity for the manufacturing solutions and services company to use proceeds from a recent underwriting offering for buybacks. “Our positive view is based on (1) structural mix shift to higher margin end markets, (2) management’s medium term target of growing core business revenues at high single digits CAGR and growing operating margin to 5.0%,” Bhattacharya said, adding that consistent and solid free cash flows, new end markets and a focus on creating shareholder value underpin his buy rating. — CNBC’s Michael Bloom contributed reporting
