Market Overview

Stifel Downgrades Jabil Circuit Following 'Strong Run

Share:
  • Shares of Jabil Circuit, Inc. (NYSE: JBL) are up 30 percent since September 9 when they were hovering around $20.
  • Stifel’s Matthew Sheerin downgraded the rating on the company from Buy to Hold.
  • Exposure to Apple and the uncertain demand outlook for the core EMS segment may hinder Jabil Circuit’s performance in the near future, Sheerin stated.

Jabil Circuit is expected to report its 1Q earnings modestly ahead of the consensus estimates. The company is also likely to maintain its FY16 guidance of revenues and EPS of $20 billion and $2.60, respectively.

Analyst Mathew Sheerin expects Jabil Circuits to record overall top line growth of 11 percent in 2016. While the company’s Diversified Manufacturing Services segment is expected to grow by 20 percent, its core EMS business is likely to grow only 4 percent given weak demand in several end markets.

Sheerin believes management has played a key role in improving the company’s performance in the last two years by investing heavily and delivering sales and earnings growth that is above market trends.

He added, however, that significant exposure to Apple Inc. (NASDAQ: AAPL) and the uncertain demand outlook in the EMS segment could restrict the possibility of a significant valuation premium to the peer group.

Sheerin expects Jabil Circuit’s February quarter sales to decline 9 percent q/q mainly due to a seasonal slowdown from Apple-related programs. “We currently see fair value in the $26-$27 range, or less than 10% above our prior $25 PT,” the report noted.

Latest Ratings for JBL

DateFirmActionFromTo
Dec 2020Goldman SachsDowngradesBuyNeutral
Sep 2020RBC CapitalMaintainsSector Perform
Sep 2020CitigroupMaintainsBuy

View More Analyst Ratings for JBL
View the Latest Analyst Ratings

 

Related Articles (AAPL + JBL)

View Comments and Join the Discussion!

Posted-In: Matthew Sheerin StifelAnalyst Color Downgrades Analyst Ratings

Latest Ratings

StockFirmActionPT
MRTXHC Wainwright & Co.Maintains257.0
NVDATruist SecuritiesMaintains672.0
NVDASusquehannaMaintains625.0
BLKBMO CapitalMaintains715.0
BLKDeutsche BankMaintains838.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com