On Sep 28, 2013, Zacks Investment Research upgraded
Plexus Corp. (
to a Zacks Rank #1 (Strong Buy). With a strong return of 51.8%
over the past six months and a positive estimate revision trend,
Plexus is an attractive investment opportunity.
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Why the Upgrade?
Better-than-expected third quarter results, robust new business
opportunities, particularly in the industrial/commercial and
medical sector and global expansion will drive growth over the
long term. New business wins are expected to drive sequential
growth in revenues throughout fiscal year 2014, which will result
in modest year-over-year growth.
Plexus believes that the completion of the Wisconsin
consolidation project, expansion in Mexico and strong new
business wins particularly in engineering solutions will help the
company to achieve its long term revenue target of $3.0 billion.
Plexus expects better ROIC performance, improving margins (the
disengagement from Juniper will boost product mix and result in
consolidation of production facilities in low-cost areas) and
aggressive share buyback to drive fiscal 2014 earnings growth.
Management expects to achieve long term operating margin of 5.0%,
driven by an improving supply chain, facility consolidations,
better sector mix and strong growth from engineering solutions.
Plexus maintained its fourth quarter revenue guidance of $545.0
to $575.0 million. Earnings outlook was upped to 66 to 70 cents
(from the prior outlook of 60 to 66 cents) for the fourth
The Zacks Consensus Estimate for fourth quarter increased 13.6%
to 67 cents per share as most of the estimates were revised
higher over the last 90 days. The Zacks Consensus Estimate for
fiscal 2013 increased 7.9% to $2.32 per share over the last 90
days. For fiscal 2014, the Zacks Consensus Estimate increased
7.1% to $2.56 per share.
The long-term expected earnings growth rate for Plexus is 10.0%.
Other Stocks to Consider:
Investors can also consider other stocks that are doing well
right now. These include
Infoblox Inc (
TIBCO Software (
Kimball International (
. While Infoblox and TIBCO carry a Zacks Rank #1 (Strong Buy),
Kimball carries a Zacks Rank #2 (Buy).