On Oct 5, 2013, Zacks Investment Research downgraded
Jabil Circuit Inc (
to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
Although Jabil reported a better-than-expected fiscal fourth
quarter of 2013, its weak first quarter and full year 2014
guidance were primarily responsible for the downgrade. We believe
that a weak first quarter revenue guidance and lowered earnings
outlook for the full year will remain an overhang on the stock
over the next several quarters.
Jabil noted that a possible disengagement with BlackBerry will
negatively impact fiscal 2014 earnings by 28 cents to 34 cents
per share. Jabil expects net revenue to decrease approximately
3.0% from the year-ago quarter to the range of $4.35 billion to
$4.65 billion for fiscal first quarter of 2014.
Jabil expects to earn $2.48 per share (down from the earlier
projection of $2.77) in fiscal 2014, driven by strong growth from
the Nypro acquisition (16 to 22 cents), restructuring benefits
(11 to 15 cents) and organic growth (11 to 31 cents).
We believe that Jabil will continue to face macroeconomic
headwinds in the near term. Moreover, the company continues to
invest in the diversified manufacturing segment, which will
increase its capital expenditure going forward.
The Zacks Consensus Estimate for Jabil's first quarter of 2014
has declined 20.3% (12 cents) to 47 cents over the last 30 days.
The Zacks Consensus Estimate for 2014 decreased 19.7% (40 cents)
to $2.43 per share over the last 30 days. The Zacks Consensus
Estimate for 2014 dropped 9.4% (25 cents) to $2.42 per share over
the same period.
Other Stocks to Consider
Not all stocks are performing as poorly as Jabil. One stock worth
considering at the moment is
Plexus Corp (
, with a Zacks Rank #1 (Strong Buy).
, both Zacks Rank #2 (Buy) stocks, are also looking good at
AKAMAI TECH (AKAM): Free Stock Analysis
FACEBOOK INC-A (FB): Free Stock Analysis
JABIL CIRCUIT (JBL): Free Stock Analysis
PLEXUS CORP (PLXS): Free Stock Analysis
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