RBC Ups Benchmark Electronics to 'Outperform'

Analyst Keith Dunne upgraded following a sharp sell-off Tuesday, when Benchmark reported first quarter earnings

RBC Capital upgraded Benchmark Electronics (BHE ) to outperform from sector perform.

On Tuesday the company posted 66 cents vs. 26 cents first quarter earnings per share. Analyst Keith Dunne says the upgrade was due to a sharp pull-back in price Tuesday, despite an earnings per share/EBITDA ratio that was largely in-line with his estimate. Dunne says there's nothing really glaring in the press release that warranted an immediate two-point drop once Benchmark opened. He thinks Benchmark also was unfairly penalized due to certain operations in China being exposed to the SARS dilemma, but he thinks the SARS factor issue is already priced into the stock.

Dunne raised the $1.72 2003 earnings per share estimate to $1.75, and sees $2.05 for 2004. He's keeping his $40 target, although he thinks Benchmark may trade more in the $25 to $33 range in the near term.

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