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Technology Stocks : Jabil Circuit (JBL)
JBL 210.71+1.7%Nov 28 9:30 AM EST
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To: Willsgarden who wrote (3689)5/5/1998 2:22:00 PM
From: Dennis R. Duke  Read Replies (1) of 6317
 
The Merrill Lynch report is an "Initial Opinion" @ C-2-1-9 (Means Above average risk, Accumulate near term, Buy long term, No cash dividends).

Quotes from the report:

Investment Highlights:

* Initiating coverage with an intermediate term Accumulate rating and long-term Buy rating.

* We think the 50% decline in Jabil's shares fully discounts the slower sales growth expected for the next four quarters.

* Jabil has among the highest operating margins, ROE, and ROA in the industry.

* The rise in Jabil's shares should be driven by an expansion in the P/E to the low-to-mid 20's over the next 12-18 months based on our F1999 EPS estimate as investors become more comfortable with the company's ability to consistently grow sales and EPS 27% a year.

Fundamental Highlights:

* We think theEMS industry should continue to grow about 25% a year through 2001.

* Jabil's sales and EPS should grow faster than the industry due to its high level of customer service, focus on rapidly growing end markets, value-added design services and synchronized worldwide manufacturing.

* Operating margins should remain above the industry because of its concentration on projects with high manufacturing content.

I will follow this post with ML's estimates in this report.

Dennis

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