UPDATE: Goldman Sachs Resumes Coverage on Sanmina on Large Run in Stock YTD, Weak ROIC

In a report published Wednesday, Goldman Sachs analyst Mark Delaney resumed coverage on Sanmina Corp. (NASDAQ: SANM) with a Sell rating and $15.50 price target.

In the report, Goldman Sachs noted, “We resume coverage of Sanmina with a Sell rating and a 6-month price target of $15.50, for 14% downside (versus 5% upside for rest of our EMS coverage). Sanmina is the best performing EMS stock YTD, up 63% vs. the group median up 47%, due to an improved cost structure and better telecom/datacenter datapoints. However, Sanmina now trades at premium to the group on our CY14 EPS estimates (compared to its historical discount of 15-20%) even it has been losing market share (its revenue has declined in 8 of 9 years yoy from CY05 to CY13E), and we estimate its ROIC of about 10% in CY14 (non-GAAP) will be below its WACC.”

Sanmina Corp. closed on Tuesday at $18.01.