Plexus Corporation (PLXS) - Bear of the Day

Plexus Corp. (PLXS) posted mixed first quarter 2011 results with earnings surpassing but revenues missing the respective Zacks Consensus Estimates marginally. Plexus reduced its outlook for the next two quarters of 2011 due to significant headwinds resulting from a slow down in production for two significant customers, an increase in operating costs and a significant production delay for the Coca-Cola Company.

Plexus' weak revenue outlook will weigh on the company s 2011 results. Intense competition in the EMS market, small market share, continued component challenges and supply chain constraints pose threats.

We remain apprehensive about the company meeting its 2011 targets and expect revenues to be down with difficult operating performance. We have reduced our estimates for fiscal 2011 and downgrade the stock to Underperform. We lower our target price to $25.00.
 
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