The shares of Jabil Circuit (JBL) are declining after Goldman Sachs downgraded the stock to Sell from Neutral, citing what it sees as weakness in the company's key markets and its rising costs. Jabil's products facilitate the design and production of electronic systems.

WHAT'S NEW: Analysts' estimates for Jabil's results for the second half of fiscal 2017 and fiscal 2018 will probably be reduced, driving the stock lower, warned Goldman Sachs analyst Mark Delaney. Another analyst at Goldman Sachs, Simona Jankowski, recently cut her iPhone unit estimates by 5% and 11% for Apple's (AAPL) fiscal 2017 and fiscal 2018, respectively, noted Delaney. Apple is Jabil's largest customer, he pointed out, adding that Goldman Sachs has also recently lowered its estimates for two other key Jabil customers, NetApp (NTAP) and Ericsson (ERIC). Moreover, analysts have lowered their estimates for seven of Jabil's ten largest customers since they reported their results for last quarter, as Jabil's printing customers have also performed poorly, the analyst reported. Meanwhile, Jabil's depreciation costs have jumped 30% this year versus last year, and they could rise further as a percent of the company's sales, wrote Delaney, who cut his price target on Jabil to $17 from $19.

WHAT'S NOTABLE: Other companies with high exposure to iPhone sales include Qualcomm (QCOM), Broadcom Limited (AVGO), Qorvo (QRVO), Skyworks (SWKS), InvenSense (INVN), NXP Semiconductors (NXPI), Cirrus Logic (CRUS), Texas Instruments (TXN) and Intel (INTC). Lexmark (LXK) and HP (HPQ) make printers.

PRICE ACTION: In early trading, Jabil fell 2% to $19.17.