Stifel's Apple (NASDAQ: AAPL) analyst, Aaron Rakers, highlighted that Jabil (NYSE: JBL) weakness on a sequential basis represents a 29.5% decline vs. prior implied -23% seq. This is more that expected but not the dramatic difference that some investors may fear. No change the firm's Buy rating or $120 price target on Apple.

Investors could question whether Jabil’s F3Q16 DMS guide implies a low/mid-30% seq. decline for Apple – compared to their -14% seq. total product (ex-Services) revenue estimate for the June quarter

Jabil reported Diversified Manufacturing Services (DMS) segment revenue at $1.76B (+5% y/y); compares to ~$1.9B guide for the February quarter (F2Q16). Jabil noted that demand weakness began in late-January with accelerating trends through February.

Jabil reported its February 2016 (F2Q16) quarterly results with revenue of $4.4 billion coming in below consensus expectations of $4.5 billion; company guided $4.4-$4.7 billion. More importantly, Jabil’s Diversified Manufacturing Services (DMS) segment revenue, in which Apple is its largest customer, totaled ~$1.76 billion (~40% of total), +5% y/y compares to growth of +52%, +42%, +48%, and +31% y/y in the Jabil’s February, May, August, and November 2015 quarters, respectively). This compares to the company’s prior expectation of a 14% y/y increase in its DMS segment for the February quarter.

Jabil noted that it saw weaker than expected mobility demand late in January followed by an acceleration through February, resulting in a $150M revenue impact. Jabil noted that it saw this weakness continue into the current quarter with an abrupt reduction seen over the past four weeks resulting in reduced expectations for the May quarter and into a portion of the August quarter.

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

Shares of Apple closed at $105.97 yesterday.