) signed a supply and manufacturing pact with Hewlett-Packard, valued at $1.4 billion over five years. UBS Warburg upgraded its investment rating on the shares to neutral from reduce.
Analyst Joseph Wolf tells S&P MarketScope the upgrade was based on three factors: the recent stock price drop; new business wins; and the company's new CEO. Wolf says that although it is difficult to predict incremental positive effects from recent new wins and the new CEO's execution on the company's restructuring, he now expects a more positive news flow from Solectron. He maintains his fiscal 2003 (ending August) earnings per share estimate of one cent, rising to 20 cents in fiscal 2004. Wolf does not anticipate a dramatic decline in Solectron's end-markets.