F2Q Earnings – Capitalizing On Chaos

研报英文原文证据摘录

F2Q Earnings – Capitalizing On Chaos

IdeaMand importantly operating margins outperformed while mgmt also expressed

confidence they can continue to pass off pricing with some minor ongoing margin

benefit from strategic inventory purchasing. Post-earnings our FY26/FY27 EPS

increases to $18.85/$23.39 (from $17.80/$21.33), but we still believe F3Q guidance

(and therefore implied F4Q EPS) is conservative, with $20+ of EPS this year a

realistic outcome. Our new $374 PT reflects our higher FY27 EPS base on an

unchanged 16x target multiple, and we remain OW-rated, with SNX one of our most-

preferred names in the space.

What we learned from SNX's F2Q (May Quarter) earnings call and callback:

(+) Hyve is in a period of accelerated growth, and we believe it can accelerate

from here. Hyve materially outperformed expectations in the May quarter - even

relative to our bullish outlook - as gross billings grew nearly 120% Y/Y in F2Q (vs.

+95% Y/Y in F1Q and +22% Y/Y in the Distribution business) and operating profit

grew ~90% Y/Y, with Hyve now accounting for nearly 30% of total company

operating profit (vs. 23% a year ago). Importantly, the strength in the quarter was

primarily driven by existing customer ramps, as newly awarded programs are

expected to ramp in late FY26 and early FY27. As the Hyve business continues to

accelerate, the company is expanding manufacturing capacity by ~1M square feet,

which is dedicated to programs already won - not speculative demand - with mgmt

signalling additional capacity buildouts may be needed in the future. Taken together,

we believe the combination of expanding wallet share with existing customers,

increasing manufacturing content and a visible pipeline of future program ramps