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NEW YORK (TheStreet) -- Sanmina (SANM) - Get Sanmina Corporation Report jumped 13.4% to $16.78 Tuesday after an upgrade from Needham & Co. following better-than-expected quarterly earnings from the chipmaker.

Needham analyst Sean K.F. Hannan upgraded Sanmina to "buy" from "hold" with a price target of $19. Sanmina "has continued to execute better than expected in bringing revenue diversity to its model and generally solid margin expansion," the analyst wrote. "With improving efforts (aided in part by recent O&G-related asset acquisition) in the Industrial and other non-traditional spaces as well as solid footing in Datacom and Computing, we are encouraged by the company's more optimistic outlook for F14."

The note from Hannan comes a day after Sanmina announced fiscal first-quarter net income of 41 cents a share. Analysts surveyed by Thomson Reuters expected net income of 38 cents a share. First-quarter revenue dropped 2.7% to $1.45 billion, in-line with analyst estimates.

TheStreet Ratings team rates SANMINA CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about its recommendation:

TheStreet Recommends

"We rate SANMINA CORP (SANM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, SANM's share price has jumped by 35.38%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SANM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • SANMINA CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SANMINA CORP reported lower earnings of $0.92 versus $2.15 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $0.92).
  • SANM, with its decline in revenue, slightly underperformed the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.54, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.12 is sturdy.
  • You can view the full analysis from the report here: SANM Ratings Report