Deutsche Bank Cuts Price Target on Jabil Circuit (JBL) Following 2Q Miss
Deutsche Bank maintained a Hold rating on Jabil Circuit (NYSE: JBL), and cut the price target to $21.00 (from $25.00), following the company's 2Q earnings report. JBL reported sales of $4.4B and EPS ex-options of $0.57 lower than the Street at $4.5B/$0.60. Weakness in the mobility business drove the miss and JBL saw an accelerated decline in this business in the first month of F3Q-16.
Analyst Sherri Scribner commented, "JBL's F2Q-16 results missed Street estimates driven by a slowdown in mobility
sales which started in late Jan and accelerated in Feb and March. Apple is JBL's largest customer (24% of sales), and FY-16 guidance implies sales declines in mobility over the next 2 Qs. While most of the bad news was related to mobility, mgmt also trimmed its FY-16 outlook for EM, now expecting more modest growth of 2% Y/Y in this segment. We continue to view JBL's high exposure to Apple as a risk, and expect non-Apple sales to see only modest growth. With risk/reward balanced at current valuations, we maintain our Hold rating."
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Shares of Jabil Circuit closed at $21.96 yesterday.