J.P. Morgan Raises FLEX Revenue Forecast

FQ3 revenues were strong and EPS was “in-line with our above-consensus estimate but incremental leverage remains challenged due to the out-of-line cost structures of the camera module, power supply and Multek PCB businesses,” J.P. Morgan reports. “We came away from results more comfortable that Flextronics International Ltd. FLEX is staying committed to substantially improving margins of the underperforming components businesses,” J.P. Morgan writes. “We forecast FLEX to grow earnings faster than peers and hence do not believe shares deserve a discount valuation. Reiterate Overweight. “We are raising our revenue forecasts in all periods on higher run-rate demand levels. EPS forecasts increase modestly as we are slightly delaying our expectations for margin improvement progression.” Flextronics International closed Thursday at $8.22.