Southwest Securities Ups Flextronics

Analyst Raymond Carpenter says the electronics manufacturing service company has built-in revenue grwoth and margin expansion opportunities

Southwest Securities ups Flextronics (FLEX ) to long-term buy from neutral.

Analyst Raymond Carpenter says Flextronics has built-in revenue growth, fueled by big outsourcing wins, a solid pipeline of new outsourcing opportunities, faster-than-expected profitability expansion, and sharply improving return on invested capital profile.

With a prospect that systematic risk could continue to compress EMS stock multiples in near-term, he thinks the company's discount valuation to its peer group, inherent revenue growth prospects, and margin expansion opportunities offer investors an attractive risk/reward ratio.

He ups his 64 cents fiscal 2005 (ending March) earnings per share estimate to 67 cents, and 80 cents fiscal 2006 to 83 cents. He sets a $16 target.