Sanmina (SANM) Moves to Strong Buy: Rationale Behind the Upgrade

Core Viewpoint - Sanmina (SANM) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2]. - A strong correlation exists between changes in earnings estimates and near-term stock price movements, largely due to institutional investors adjusting their valuations based on these estimates [4][6]. Company Performance and Outlook - Sanmina is projected to earn $6.01 per share for the fiscal year ending September 2025, representing a year-over-year increase of 13.8% [8]. - Over the past three months, the Zacks Consensus Estimate for Sanmina has risen by 6.4%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Sanmina to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10].