Shares of Jabil Circuit, Inc. JBL traded slightly up on Thursday, following the announcement of the company’s third quarter results.
EPS of $0.17 beat the Street’s consensus by $0.01 and revenue of $4.31 billion came in $130 million ahead of estimates, but the fourth quarter outlook was disappointing. Management guided for EPS of $0.15 to $0.35, on sales of $4.15 billion to $4.35 billion. Consensus called for EPS of $0.53 and revenue of $4.66 billion.
Deutsche Bank analyst Sherri Scribner reiterated a Hold rating on Jabil’s stock, trimming her price target from $21 to $18, citing a delay in the mobility ramp.
Related Link: Citi Reiterates Sell On Jabil Following Guidance Cut
The expert explained that, while robustness in Electronics Manufacturing (EM) offset an anticipated slowdown in Diversified Manufacturing (DM), helping the company beat expectations, guidance was lower than expected due to the aforementioned delay in the ramp in mobility programs.
“Despite the push out, JBL sees a strong snap back in F1Q-17, noting that it is maintaining share with its top customer,” Apple Inc. AAPL, Scribner said.
Having said this, Deutsche Bank analysts continue to see the elevated exposure to Apple as a risk. Given their “cautious view on Apple’s growth,” they also approach Jabil with caution, maintaining a Hold recommendation, as the risk/reward profile remains balanced.
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