UBS Maintains a 'Buy' on Jabil Circuit (JBL); Positive Meeting with Mgmt - Remain Confident in Strategy

UBS maintains a 'Buy' on Jabil Circuit (NYSE: JBL) price target raised from $23 to $27.

UBS analyst says, "We hosted Jabil management at a few client meetings and mgmt remains confident in its business transformation, actively articulated starting late 2010, towards its higher margin DMS segment. Mgmt remains comfortable with 1H/2H FY12 conenusus Revs of $8.4b/$9b (UBSe $8.4b/$8.7b), implying rev growth of ~6% q/q each in FY3Q & FY4Q. E&I OM is expected to improve from 2% to ~4% by the Aug/Nov ’12 qtrs (UBSe 3.7% in Aug), with HVS OM at 3%+ for FY12 (UBSe 3.1%)."

"Given the focus on DMS, we believe tuck-in M&A, likely focused on after-market services and healthcare, and incr. capex to support growth in smartphones/tablets will remain primary uses of cash, with an increasing focus on dividends/share buy backs with excess cash. We forecast FCF of $400-500m+ for FY13/FY14."

For an analyst ratings summary and ratings history on Jabil Circuit click here. For more ratings news on Jabil Circuit click here.

Shares of Jabil Circuit closed at $23.97 yesterday.

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