NEW YORK (AP) -- Synnex shares fell Wednesday as an analyst downgraded the high-tech contractor, saying there's limited room for profit margins to expand further.
THE SPARK: Brian Alexander of Raymond James cut Synnex Corp. to "Market Perform" from "Outperform."
THE ANALYSIS: Alexander said in a client note that Synnex still has ways to improve its profitability, but it will likely see only moderate improvement in profitability as it faces soft demand and competitive pricing.
The analyst also pointed out that the company's stock has outperformed since it announced first-quarter results in March, rising 13 percent. That beats the 4 percent climb by the S&P 500 during that period. Synnex is expected to report its second-quarter results on June 25.
The company declined to comment on the analyst report.
SHARE ACTION: Down 45 cents to $41.43 in afternoon trading. The stock has traded in a 52-week range of $30.70 to $42.89. Year-to-date, the stock is up about 19 percent.