Banc of America Cuts Estimates on Flextronics

But analyst Paul Fox is keeping a strong buy rating on the shares

Flextronics (FLEX ) sees fourth quarter earnings per share at the lower end of the $0.13-$0.16 range of estimates from Wall Street analysts. Banc of America Securities cut its estimates for Flextronics.

Analyst Paul Fox says he was looking for $0.16 EPS. He says that absent any sequential improvement in revenues, management expects EPS growth to come at a slower pace than the Street; although they feel there is room for upside once demand and pricing on printed circuit boards start improving, and growth resumes in the telecom business. Fox cut his $0.16 fourth quarter cash EPS estimate to $0.13, on a lower gross margin forecast of 6.2%. He also lowered his $0.85 fiscal 2003 (ending March) EPS projection to $0.68. Fox is keeping his strong buy rating on the shares, but cut his $35 price target to $25. The analyst says the stock is selling at 25 times his calendar 2002 and 19 times his calendar 2003 EPS estimates. He views the views 19x multiple as not reflective of the company's true earnings power.

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