Plexus (PLXS) Stock Forecast & Price Target

Plexus Corp is experiencing positive momentum across its reportable segments, with significant growth expected in the Aerospace and Defense (A&D) sector, projected to exceed previous management targets of 9-12% for FY26, driven by strong demand in defense and space subsectors. In the Healthcare and Life Sciences segment, which accounts for 43.6% of revenue, the company reported a 10% quarter-over-quarter growth, aligning with guidance for a high-single to low-double-digit sequential increase, indicating robustness in this critical area. Overall, Plexus's first-quarter revenue of $1.07 billion marked a 9.6% year-over-year increase, with future revenue expectations signaling continued positive performance, particularly with forecasts of a 15.3% year-over-year increase in FQ2'26.

Plexus Corp reported a significant decline in free cash flow, falling to $16 million in FQ1'26 from $97.2 million in the prior quarter and $27 million year-over-year, raising concerns about future liquidity amid an economic slowdown. The industrial segment, contributing 39.8% to FQ1 revenue, experienced a contraction of 7.6% sequentially and 3.6% year-over-year, aligning with management expectations but reflecting potential weaknesses in demand across major market verticals. Additionally, the company's return on invested capital (ROIC) decreased to 13.2% from 13.8% in FQ4'25, coupled with stagnant gross margins and rising operational challenges, suggesting difficulties in operational optimization and differentiation within the competitive landscape.