Jabil Circuit to Trade In-Line
Headquartered in St. Petersburg, Florida, Jabil Circuit, Inc. ( JBL - Analyst Report) is one of the largest global suppliers of electronic manufacturing services (EMS) used in communication products, computer peripherals and automobile industries. Revenue for the most recent quarter was $3,264.9 million, an increase of 4.3% from $3,129.8 million reported in the year-ago quarter. This was in line with the company's guidance of $3.2 billion to $3.3 billion range. GAAP EPS in the quarter was $0.28 versus $0.06 in the comparable quarter last year.
For the first quarter of fiscal 2009, Jabil expects revenue in the range of $3.40 billion to $3.60 billion, with an estimated core operating margin range of 3.0% to 3.4%. Core EPS is anticipated to be in a range of $0.30 to $0.38 range. Selling, general and administrative expenses are estimated to be approximately $121 million, research and development costs are expected to be approximately $9 million, and amortization of intangibles to be approximately $9 million.
Given improvements in JBL’s operations, we do believe that the stock should trade in-line with the industry median. We maintain our Hold rating on the stock and have cut our target price to $11.50, which reflects a multiple of 8.8x our 2009 estimated EPS of $1.31.