Contract Manufacturers: Citi Upgrades FLEX, JBL, CLS

Citigroup analyst Jim Suva this morning turned “more constructive” on the contract electronics manufacturers, raising his ratings on Flextronics (FLEX) and Jabil (JBL) to Buy from Hold, lifting Celestica (CLS) to Hold from Sell and adding FLEX to the firm’s Top Picks Live list.

“In our view, industry fundamentals have bottomed, and we see revenue growth and margin expansion over the next 24 months,” he writes.

Suva reports that a survey of 160 global electronics companies find inventory days have dropped 5 days quarter-over-quarter across the supply chain. “In our view, the de-stocking process is over, and we expect revenue trends across the supply chain to begin more closely to reflect end demand,” he writes,

Suva upped his price target for FLEX to $8.50 from $5. For JBL, he goes to $13, from $8. For CLS, his new target is $10, up from $6.75.

In today’s trading:

• FLEX is up 22 cents, or 3.9%, to $5.86.


• JBL is up 49 cents, or 5.1%, to $10.15.


• CLS is up 34 cents, o4 4.2%, to $8.50.