Fabrinet shares declined as management warned that component and material shortages may constrain growth in its datacom business. The market reaction reflects a reset of expectations and profit-taking following a strong rally.
The stock fell 13% on Friday, June 5. Analysts cited in-line guidance and supply chain commentary from the May 4 earnings call as the primary catalysts for the decline.
The company’s recent quarterly outlook failed to provide the significant upside surprise investors anticipated. In a separate development, the average one-year price target for Fabrinet’s European listing increased.