Stifel Downgrades TTM Technologies Despite History Of Apple Product Connection

In a report published Wednesday, Stifel analyst Matthew Sheerin downgraded the rating on TTM Technologies, Inc. (NASDAQ: TTMI) from Buy to Hold. The analyst believes that the successful integration of Viasystems Group, Inc. (NASDAQ: VIAS) is already priced into the stock.

The rating on the company had been upgraded in April 2014 after TTM Technologies successfully ramped new product lines for Apple Inc. (NASDAQ: AAPL) in 2H14, which led to margin expansion and revenue growth for the former company. TTM Technologies also successfully trimmed its portfolio and implemented cost cutting initiatives, while also completing the Viasystems acquisition.

However, with the shares having risen 43 percent year-to-date, it is trading in-ine with its EMS peers. "To be sure, management has done a credible job of improving core margins and thus deserves credit for achieving the stated cost synergies, and potential manufacturing consolidation. But at this point we prefer to move to the sidelines and until we get more clarity from management on its earnings call in August," Sheerin said.

The company has been able to achieve cost savings worth about $55 million, most of which was driven by overhead reduction, while the rest was contributed by operating plant efficiencies. The analyst expects further cost saving to be gradual, with most of the benefits coming in during 1HF16. However, the analyst also expects incremental expenses due to the recent loan.

The FY15 and FY16 EPS and revenue estimates for the company have been raised.