Last Update 26 Feb 26

PLXS: Higher Earnings Assumptions And Buybacks May Sustain Sideways Trading

Narrative Update on Plexus

The analysts’ average price target for Plexus has increased by a combined $105 in recent reports, reflecting updated assumptions for discount rates, revenue growth, profit margins, and a slightly lower future P/E multiple.

Analyst Commentary

Recent Street research on Plexus centers on higher price targets, with analysts updating their models around discount rates, revenue expectations, margin assumptions, and a slightly lower future P/E multiple. While the tone across reports is constructive, there are still areas where analysts see execution and valuation risks that they are watching closely.

Bullish Takeaways

Bullish analysts are comfortable lifting their price targets by increments of $25, $30, and $50, which suggests their updated models support a higher implied equity value even after using a slightly lower future P/E multiple.
Across the recent reports, analysts are reworking revenue and profit margin assumptions, which indicates they see enough support in Plexus' underlying business drivers to justify higher earnings power in their frameworks.
The clustering of positive target changes over a short period signals that several research teams are revisiting Plexus at the same time, which can help keep investor attention on execution milestones and potential upside to their existing assumptions.
By explicitly incorporating revised discount rates into their models, bullish analysts are showing that their higher targets are not simply sentiment driven, but grounded in refreshed risk and cash flow estimates.

Bearish Takeaways

Even as price targets move higher, analysts are using a slightly lower future P/E multiple, which points to some caution around how much investors may be willing to pay for Plexus' earnings later on.
The need to adjust discount rates highlights ongoing sensitivity to the broader cost of capital, which can limit upside if risk free rates or equity risk premiums move against Plexus' valuation setup.
Revisions to revenue growth and margin assumptions cut both ways, and bearish analysts are likely focused on the execution risk that Plexus must manage to meet the higher expectations implied in these updated models.
Multiple target changes in quick succession can also be a sign that forecasts are still settling, so there is room for volatility if Plexus’ actual results differ from the refreshed analyst assumptions.

What's in the News

Plexus issued earnings guidance for its fiscal second quarter ending April 4, 2026, calling for revenue of US$1.110b to US$1.150b and GAAP diluted EPS of US$1.53 to US$1.68 (Key Developments).
Between September 28, 2025 and January 3, 2026, Plexus repurchased 153,047 shares, representing 0.57% of shares, for US$22.4m (Key Developments).
Under the buyback announced on May 14, 2025, Plexus has in total repurchased 265,648 shares, representing 0.99% of shares, for US$37.37m (Key Developments).

Valuation Changes

Fair Value: The fair value estimate remains unchanged at $200.80, indicating no shift in the overall output of the valuation model.
Discount Rate: The discount rate has risen slightly from 8.447225% to 8.462731%, signaling a modest increase in the assumed cost of capital applied to Plexus.
Revenue Growth: The revenue growth assumption is effectively flat at 9.054375%, with only a very small numerical adjustment to 9.054375% in the updated model.
Net Profit Margin: The profit margin input is also essentially unchanged, moving marginally from 4.535369% to 4.535369% in the latest run.
Future P/E: The future P/E multiple has fallen slightly from 27.43x to 26.39x, which means the model now applies a lower earnings multiple to Plexus in later years.

Focus on high-growth, complex sectors and value-added services is driving a shift toward higher-margin, long-term contracts and stronger revenue consistency.
Global facility expansion and strong cash flow position Plexus to capitalize on sector trends, supporting sustained revenue growth and enhanced shareholder returns.
Plexus faces revenue and margin volatility due to demand uncertainties, sector cyclicality, customer concentration, rising costs, and intensifying industry competition.

Catalysts

About Plexus

Provides electronic manufacturing services in the United States and internationally.What are the underlying business or industry changes driving this perspective?

Plexus is capitalizing on the growing demand for advanced electronics manufacturing fueled by digital transformation, IoT expansion, and emerging technologies like AI and connected vehicles, as reflected in a robust pipeline of new program wins across high-growth sectors-this is likely to drive sustained multi-year revenue growth and larger addressable markets.
Strategic expansion and high utilization of global facilities, particularly the new Malaysia site (with initial focus on semicap and planned healthcare ramp), positions the company to meet increased demand both from reshoring/regionalization trends and sector-specific growth, which should support ongoing revenue gains and improved asset turnover.
The company's increasing success in winning programs in high-margin, complex sectors such as healthcare/life sciences, aerospace, and defense (including strong defense pipeline in Europe and record sector wins), is shifting the revenue mix toward segments with higher pricing power and more stable, long-term contracts-this should positively impact both revenue consistency and net margin expansion.
Continued investment and strong performance in high-value engineering and design services (now exceeding $100 million, growing, and diversified across more sectors), is allowing Plexus to move up the value chain, resulting in larger contract sizes, enhanced customer stickiness, and higher gross margins.
Robust free cash flow generation and improved working capital efficiency have enabled greater returns to shareholders and provide Plexus with flexibility for further growth investments, supporting long-term earnings expansion.

Plexus Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Plexus's revenue will grow by 6.1% annually over the next 3 years.
Analysts assume that profit margins will increase from 4.0% today to 4.2% in 3 years time.
Analysts expect earnings to reach $202.1 million (and earnings per share of $7.49) by about September 2028, up from $162.7 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 25.2x on those 2028 earnings, up from 22.6x today. This future PE is greater than the current PE for the US Electronic industry at 23.9x.
Analysts expect the number of shares outstanding to decline by 0.39% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.28%, as per the Simply Wall St company report.

Plexus Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Ongoing tariff-related uncertainties and rising protectionism lead customers to remain in a wait-and-see mode, which could dampen order activity and create unpredictability in revenue growth for Plexus over the long term (impact: revenue volatility and slower top-line growth).
Customer-specific demand pushouts in high-growth verticals like semicap (now forecasting low double-digit growth instead of mid-teens), as well as flat outlooks in Aerospace, highlight Plexus's vulnerability to cyclical and program-driven fluctuations in its key sectors (impact: revenue instability and potential earnings variability).
High customer concentration and a heavy reliance on large contract ramp-ups (notably in sectors such as healthcare and aerospace/defense) as well as the need for continuous new customer onboarding increase the risk that order reductions or delays from a few key customers could destabilize results (impact: revenue concentration risk and potential margin pressure).
The anticipated margin drag from startup facilities (e.g., new Malaysian plant) and ongoing integration costs, combined with the long-term threat of margin compression from global competition and potential cost inflation in materials and labor, may erode profitability and limit sustained operating margin expansion (impact: net margin compression and lower earnings growth).
The commoditization trend in the electronics manufacturing services industry, coupled with potential further consolidation among large OEMs, could increase price-based competition and bargaining power against mid-sized providers like Plexus, putting sustained pressure on both revenue and margins (impact: industry margin erosion and profit pressure).

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $154.6 for Plexus based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.8 billion, earnings will come to $202.1 million, and it would be trading on a PE ratio of 25.2x, assuming you use a discount rate of 8.3%.
Given the current share price of $136.51, the analyst price target of $154.6 is 11.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Execution On Expansion Plans Will Shape Near-Term Manufacturing Opportunities