Jabil Circuit climbs after Baird upgrade
NEW YORK, Dec 08, 2007 (AP via COMTEX) --
Company: Jabil Circuit, Inc. (JBL)
Shares of Jabil Circuit Inc. rose Friday after a Baird analyst upgraded the electronics manufacturing service provider, citing stability in most of the company's end markets and expected margin improvement.
Analyst Reik Read, who also said the stock had an attractive valuation, upgraded Jabil to "Outperform" from "Neutral."
The analyst said that excluding the consumer and housing-related industrial sectors, Jabil's end markets are "relatively stable."
"Jabil customers in the networking and storage segments generally reported in-line third-quarter results, with international growth offsetting weakness in the U.S. enterprise markets," the analyst wrote.
Read added that while the company's automotive segment has been weak recently, he thinks the industry is "near a trough and should return to low single-digit growth in 2008."
In addition, the company's restructuring efforts, along with improved growth, "will lead to margin increases over the medium term," Read wrote.
Jabil, which is restructuring its business to move production from Western Europe to cheaper locations around the world, "is likely to incur only minimal duplication costs" during this transition, he added.
Shares of the St. Petersburg, Fla.-based company rose 50 cents, or 2.9 percent, to $17.74 in midday trading. The stock has traded in a 52-week range of $16.17 to $29.11.
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Company: Jabil Circuit, Inc. (JBL)
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