ARGUS Reiterates 'Buy' Rating on Jabil Circuit (JBL)

September 3, 2008 10:30 AM EDT

ARGUS reiterates a 'Buy' rating on Jabil Circuit Inc. (NYSE: JBL). Price target $22.

ARGUS says, "JBL continues to perform relatively well, despite the severe turbulence affecting overseas rivals and specifically Taiwanese ODM companies such as Compal and Hon Hai Precision. Jabil has a solid customer set that includes Cisco (Nasdaq: CSCO) and Hewlett-Packard (NYSE HPQ) among its 10%-plus revenue customers; these two companies have so far been able to sidestep the worst of the slowdown in IT and enterprise network spending. The company also has significant revenues outside the volatile computer, communications, and consumer electronics sectors. Moreover, it has been shifting a portion of its high-velocity product line from a horizontal manufacturing model to a more vertical model. Over time, this should enable Jabil to expand margins and derive more value from its operations. We also believe that the company will be optimally positioned once consumer product demand recovers from current softness."

Jabil Circuit, Inc. (Jabil) is a provider of worldwide electronic manufacturing services and solutions. [SM]

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