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Author: GreenSpam100 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 553  
Subject: $1 Billion Fortune Cookie for FLEX Date: 4/6/2006 1:11 PM
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Kevin Kessel, analyst at Bear Stearns, sent this out to clients today. Looks like some of the good news we have been waiting for has arrived:

"Flextronics (FLEX-$10.85) - Outperform
Flextronics Set to Sign $1B Contract With China Today; We Are Buyers of the Stock and Reiterate Our $15 Target



ALL YOU NEED TO KNOW: Today a signing ceremony will be held in Los Angeles where 27 companies will meet with Madam Wu Yi, Vice Premier of the People's Republic of China to sign deals worth $4B. We believe FLEX will be awarded the largest contract in the group, a $1B contract for auto, industrial, and medical OEMs in China.

ADDITIONAL LARGE BENEFICIARIES: Other companies we believe that are signing deals include Motorola for communications equipment ($560M), Microsoft for software ($400M), GE Energy for power generation equipment ($350M), GM for autos ($306M), Cisco ($200M), and Qualcomm ($300M).

STILL VERIFYING... We are still in the process of verifying the exact details of these contracts for FLEX and whether they have been previously included in high-level guidance (i.e. as a part of their previously announced wins). Our sense is that they are new, but we have no idea when they would ramp or what the margin structure might be.

... AS A RESULT WE ARE MAKING NO CHANGES TO OUR ESTIMATES OR PRICE TARGET AT THIS TIME. Our March qtr revenue and EPS ests remain $3.5B and $0.15 vs. FC of $3.6B and $0.15 and our June qtr revenue and EPS ests remain $3.7B and $0.15 vs. FC of $3.8B and $0.16. Our price target remains $15, which is 15x our CY07 EPS est of $0.98.

WE CONTINUE TO LIKE FLEX AND WOULD BE BUYERS TODAY. Our target price of $15 is 38% above current levels. In addition, we believe the company's NT transition in Calgary is on track for the June quarter and that the monitization of its software division will be a value creating event."


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