Sanmina Not Rebounding Yet

Sanmina-SCI (SANM - Analyst Report) is currently struggling with industrywide weakness and challenging end-market demand. After exiting its PC business, Sanmina has focused on its core business and margin improvement.

The company is facing weak demand across its entire end-markets, leading to disappointing Q109 results. Although Sanmina has improved its cost structure, topline growth is sluggish and we believe the company will struggle in 2009.

Moreover, we would like to see sustained growth before becoming more positive on the stock. Given the weak and uncertain economic environment, we maintain our Sell recommendation on SANM shares with a lower 6-month price target of $0.20 due to the company's gloomy outlook.

Priyanka Poddar contributed to this report.