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Technology Stocks : Jabil Circuit (JBL) -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (5683)	11/13/2000 9:31:52 PM
From: Dr. Doktor	Read Replies (1) \| Respond to of 6317

Robbie Stephens upgrades ECM's Good strength on all but SCI in very weak market.. Any thoughts on why SCI is lagging? Thanks The following is being issued by Robertson Stephens, a member of the National Association of Securities Dealers, CRD number 41271: Rating Changes Celestica Inc. (NYSE: CLS) ($54.75) Strong Buy J. Keith Dunne, Electronic Manufacturing Products and Services "We are raising our rating to Strong Buy from Buy to reflect the most attractive valuations since the Fall 1999, despite continuously exceeding expectations leading to a 35% increase in our fiscal 2001 Cash EPS estimates in the past four months," said Dunne. "At 29 times forward P/E estimate, CLS is trading well below our expected 40% growth rate for 2001. Importantly, we believe exposure to Cisco and Dell, two OEMs garnering increased scrutiny these days, is only 6-8% each and business remains robust at SUNW, in our opinion. We expect internal sales growth to accelerate to 41% in fiscal 2000, up significantly from 29% last year. Currently, we estimate internal sales gains of closer to 20-25% in fiscal 2001, though our estimates could prove to be conservative depending upon the pace of new program wins, especially for communications customers such as Lucent, and the success the company has in integrating and ramping production at the recently acquired IBM sites. Contrary to recent articles in the press, we do not believe Celestica was a serious contender for acquiring NatSteel, though we believe management is interested in expanding its presence in Asia." Plexus Corp. (Nasdaq: PLXS) ($49.38) Strong Buy J. Keith Dunne, Electronic Manufacturing Products and Services "We are raising our rating to Strong Buy from Buy to reflect the most attractive valuations since the Fall 1999 and acceleration in internal growth from an estimated 32% in fiscal 2000 to an estimated 47% growth in fiscal 2001," said Dunne. "In contrast, the company is trading at only 31 times our calendar 2001 Cash EPS. We believe Plexus has industry-leading engineering, design and complex assembly capabilities, which is allowing the company to generate among the highest margins and returns on invested capital in the industry. We believe management is successfully integrating recent acquisitions that have significantly expanded geographic reach, service capabilities, and customer diversification. We expect further transactions may lead to increases in our sales and Cash EPS estimates. We believe management has become much more aggressive in its efforts to expand into higher-end communications and medical applications and has sprinkled its customer mix with leading venture-backed companies that could follow Arrowpoint's footsteps and become major customers over the next 4-6 quarters." SCI Systems, Inc. (NYSE: SCI) ($36.44) Strong Buy J. Keith Dunne, Electronic Manufacturing Products and Services "We are raising our rating to Strong Buy from Buy, though readers of our October 13 report should realize this is largely a formality to reflect our initial use of this rating for the EMPS industry," said Dunne. "We continue to believe the company is undergoing significant fundamental positive changes backed by a much broader and deeper management team that we had the pleasure of meeting with in early November. We continue to believe our fourth quarter 2001 sales of $3.3 billion is achievable assuming the recent Ericsson programs ramp as scheduled and add about $500 million in incremental sales in the fourth quarter of 2001. We also expect the company to largely achieve our December sales estimate of $2.5 billion and find it amusing that two months ago, the Street believed a $10.5 billion sales year was unachievable, only to start believing the target was too conservative a few weeks later, when the $2 billion agreement with Ericsson was announced. We believe SCI is likely to begin assembling port adapters for Cisco with additional PCBA and full system assembly programs likely to be announced over the next year. Given the 50-60% growth that Cisco has discussed, we expect Cisco could become a top 10 customer in the next fiscal year. Currently, SCI is trading for 17 times our calendar 2001 Cash EPS, nearly 40% below its peers despite having an end- market mix that is less PC centric and more attractive than Solectron, post the NatSteel acquisition." Jabil Circuit Inc. (NYSE: JBL) ($44.25) Buy J. Keith Dunne, Electronic Manufacturing Products and Services "We are increasing our rating to Buy from Long-Term Attractive to reflect the most attractive valuations since the Fall 1999, despite the fastest rate of internal sales growth in the industry," said Dunne. "At 35.7 times our forward P/E estimate, JBL is trading well below our expected 48% internal sales growth rate for 2001. We believe the increase in raw inventory levels at Cisco could be positive for Jabil by lowering the prospect that tight component availability may restrict near-term growth. Additionally, we are not expecting significant growth in Dell following a significant ramp in notebook computer production in fiscal 2000. We believe Jabil may have the strongest relationship in the industry with Lucent, a major communications OEM we believe is on the verge of a major outsourcing program. Recently, the CEO of Jabil joined me in a panel before top Lucent executives to discuss changing business models and the need for speed. We suspect Jabil is near the top of the list for significant levels of new business opportunities with Lucent. We believe major plant expansions are progressing on plan, though startup expense are likely to restrict EPS growth by up to a few cents per quarter over the next several quarters, especially if the company wins significant new business. We expect the company to continue actively seeking acquisition partners, though none are in our forecast given management's rigorous criteria."