UPDATE: Raymond James Upgrades Benchmark (BHE) to Outperform
Raymond James upgraded Benchmark (NYSE: BHE) from Market Perform to Outperform with a price target of $24. The change follows "solid" Q2 results. Analyst Brian G. Alexander also noted valuation support from book value, as shares usually trough between 0.7-0.8x.
"In a difficult environment where EMS peers are reporting mixed results, Benchmark posted revenue/margin/EPS upside in 2Q. Revenue was $664 million (high end of guidance), operating margins were 4.2% (up 13 basis points y/y), and EPS of $0.42 beat RJ/consensus of $0.39. While revenue and EPS guidance is modestly below consensus, new program wins ($110-130 million) were stable and supportive of future revenue growth," said Alexander.
"Also, operating cash flow was solid ($52 million), share repurchases ($19 million) were more aggressive, and book value/tangible book value of $24.57/$23.72 should provide valuation support. Shares usually trough between 0.7 0.8x book value, suggesting downside in the high teens. With shares at $20.61 (0.8x book), we see limited downside (<10%)," added the analyst. "Regarding upside, the median EV/EBITDA over the past three years is ~6x, and we use a more conservative 5x given demand challenges to support our price target of $24 (16% above current)."
For an analyst ratings summary and ratings history on Benchmark click here. For more ratings news on Benchmark click here.
Shares of Benchmark closed at $20.61 yesterday.