Sept 28 (Reuters) - Shares of Jabil Circuit Inc jumped as much as 11 percent On Wednesday, a day after the contract manufacturer posted fourth-quarter profits above market estimates, and at least two brokerages raised their price targets on the company’s stock.
Jabil Circuit, which supplies to tech giants such as Cisco Systems , Hewlett-Packard , IBM Corp , Nokia Corp , and Research in Motion , saw revenue rising to $4.28 billion from $3.86 billion a year ago.
“Reported EPS & outlook underscore JBL’s ability to plow through this difficult macro environment,” a Citigoup analyst said and raised the price target to $22 from $19.
Jabil, which competes with Flextronics International Ltd and Sanmina-SCI Corp , said its diversified manufacturing services (DMS) contributed about 40 percent of sales in the quarter, up from 33 percent, a year ago.
“While the company’s exposure to RIM (10 percent customer) weighs on investor sentiment today, successful diversification away from RIM and toward DMS is likely to ultimately drive JBL’s valuation multiple higher,” analysts at Goldman Sachs said.
They raised the price target to $23 from $21 and reiterated a “buy” rating on the stock.
Shares of Jabil were trading up 9 percent at $18.93 after earlier touching a high of $19.29 on the New York Stock exchange on Wednesday. (Reporting by Rachana Khanzode in Bangalore; Editing by Joyjeet Das)