Collins Stewart Downgrades Flextronics (FLEX) to Hold

October 6, 2008 9:39 AM EDT

Collins Stewart downgrades Flextronics (Nasdaq: FLEX) from Buy to Hold.

Collins analyst says, "We are reducing our investment rating on Flextronics to HOLD based on our concerns regarding the impact of softening end-market demand trends in the infrastructure (i.e., telecom, networking, computing; 35% of sales) and consumer markets (consumer digital at 13% and mobile phones at 19%). The numerous negative tech pre-announcements over the past few weeks are likely the beginning of more challenging trends that we believe will be difficult for Flextronics to manage in light of the company's high operating leverage, vertically integrated model and more debt-laden balance sheet...We believe Flextronics will continue to be a major player in the EMS industry, however, the softening end-market demand trends will likely challenge the company in the coming quarters and the stock could remain a value trap."

Flextronics International Limited (Flextronics) is a global provider of vertically-integrated advanced design and electronics manufacturing services (EMS) to original equipment manufacturers (OEMs).

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