After a lackluster performance by electronic components manufacturer Benchmark Electronics, Inc. (BHE), Zacks senior technology analyst Steve Biggs , CFA reiterates his Hold rating on the shares.  The following excerpts explain his position:

Benchmark Electronics, Inc. is making progress in emerging EMS markets, such as medical and testing & instrumentation. However, its core computer business is experiencing decreasing revenues and still accounts for more than half of its total sales. We, therefore, reduce estimates for the remainder of 2007 and 2008.

BHE is well-positioned in the manufacturing electronics market and should continue to grow over the longer-term as it becomes more efficient and continues booking new programs. However, weak demand and slower product and program transitions have prompted the company to lower its revenue guidance for the third quarter of fiscal 2007.

Shares of Benchmark are currently trading at 14.7x our reduced 2007 EPS estimate of $1.47, a discount to the industry. The company does appear to have more short-term challenges than its peer group and as a result, we believe the shares should remain at a discount to the peer group. We, therefore, maintain our Hold rating on the shares of BHE and lower our price target to $23.00. With fiscal 2007 coming to an end, we roll our valuation to 2008 numbers. Our new target price reflects a multiple of 12.1x our 2008 EPS estimates of $1.90, still a discount to the peer group.