Jabil today
(As of 12/20/2024 5:40 PM ET)
- 52 week range
- $95.85
▼
$156.94
- Dividend yield
- 0.22%
- P/E ratio
- 13.16
- Target price
- $153.17
Jabil New York Stock Exchange: JBL continues to face headwinds, but its fiscal first-quarter 2025 report proves the business has bottomed out and the outlook is good. The report included revenue declines but ahead of revenue and earnings, compounded by improved forecasts above consensus.
The bottom line is that the contraction is slowing and the business will return to growth soon, by the end of calendar 2025. Analyst optimism for 2024 is likely to strengthen in 2025 as the quarters progress, as forecasts have been weak. The strength was driven by critical segments including cloud, data center infrastructure and digital commerce, which go hand in hand with artificial intelligence and digitalization globally.
Jabil has a strong quarter, rating rises, shares rise
Jabil had a good quarter in the first quarter despite a year-over-year decline in revenue. The company’s net revenue of $6.99 billion was down year-over-year, but the decline was 16.7% less than the prior-year quarter and well ahead of consensus. Analysts had forecast another 500 basis points of decline and weaker forecasts. Margin news is also favorable, with margins tightening due to deleveraging, but less than expected. The net result was $2.00 in adjusted earnings per share, beating targets by $0.012, or approximately 500 basis points.
The market catalyst for results is the forecast. The company aggressively initiated guidance for the second quarter, setting revenue and profit targets above market expectations and raising full-year targets. The company now expects adjusted earnings per share to be around $8.75 and may be cautious in its estimates. In 2024, data center and cloud growth will reach new heights. It is expected to continue or accelerate in 2025 thanks to hyperscalers, including Apple. NASDAQ:AAPLAlphabet NASDAQ: GOOGLEand Amazon NASDAQ:AMZNare racing to meet industry demand while simultaneously advancing their technologies.
Cash flow is an important detail for investors. The company’s cash flow has been impacted by declining revenue, but remains sufficient to support share buybacks and a healthy balance sheet. The balance sheet fundamentals are a bit sketchy, with cash dwindling and capital falling, but there is a mitigating factor. That’s the effect of the share buyback, which includes a 5.7% quarterly increase in treasury shares and a 13% YoY reduction in share count. While this is bad on paper, it is good for investors and will support stock prices over time. Nothing has changed at Jabil except that cash has been converted into fewer shares. Other balance sheet highlights include stable debt levels and low leverage with long-term debt at 2x equity.
Analysts predict positive trends; Institutions will buy Jabil in 2024
Jabil stock forecast for today
$153.17
Growth potential 5.63%Moderate purchase
Based on ratings of 7 analysts
| High forecast | $179.00 |
|---|---|
| Average forecast | $153.17 |
| Low forecast | $133.00 |
Jabil Stock Forecast Details
Jabil’s analytical activity in 2024 is modest but otherwise positive. MarketBeat tracks seven analyst ratings; two are tied to Hold and five are tied to Buy, which equates to a Moderate Buy consensus. The consensus price target suggests the stock is fairly valued at nearly $145, but the revision trend points to a new all-time high. The first change to hit the tracker after the report was Goldman Sachs raising its price target to $145, which is in line with consensus, but recently set targets put this market around $160, which would be a new high.
Institutional trends will also support this market in 2024. Institutions own over 90% of the shares and make on-balance sheet purchases every quarter, providing a strong tailwind for the market. Their support is unlikely to wane in 2025 due to cash flow, buyback prospects and very low valuations. This company trades at just 15 times its earnings.
Technical forecast: Jabil approaches critical level
Jabil’s share price rose following the release of its first-quarter data and is likely to rise in 2025, continuing its 2024 recovery. However, the market is showing resistance below the 2024 highs, which could limit gains over the next few weeks or months. If the market is unable to move higher, it may sell to close the gap created by the release, allowing the market to realign with the price action. Critical resistance targets are located in the area of $150 and $157.
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