Raymond James comments on weakness across EMS sector

Raymond James analyst Melissa Fairbanks notes that Electronic Manufacturing Services sector stocks are trading sharply lower today after a few significant reports last night, overnight and this morning, including from Tesla (TSLA), STMicroelectronics (STM), Flex (FLEX) and Plexus (PLXS). For Flex in particular, the firm believes “at least 2-3 turns of the recent multiple expansion” are tied to the AI datacenter business and sees the company’s outlook for FY26 cloud-plus-power revenue remaining unchanged driving today’s trading action. Jabil (JBL) shares are also down about 6% today, notes the analyst, who says it was “not surprising” that Tesla’s report was incrementally weaker and believes Jabil has already adequately handicapped this business. Plexus shares being down 12%-13% “makes no sense to us” given that it has no AI exposure and no auto exposure, adds the analyst, who adds that while the company’s guidance “was (very) slightly below expectations,” it still assumes quarter-over-quarter growth.