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Based in Saint Petersburg, Florida, Jabil Inc. (JBL) provides manufacturing services and solutions worldwide. Valued at a market cap of $12.9 billion, the company operates in two segments: Electronics Manufacturing Services and Diversified Manufacturing Services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and JBL fits right into that category, signifying its substantial size, stability, and dominance in the electronic industry. Strategic relationships with key customers, with the top five contributing 44% of net revenue, underscore Jabil's ability to maintain long-term partnerships and generate recurring revenue, though this reliance poses potential risks.
Despite its widespread reputation, the electronic design titan has fallen 19.3% from its 52-week high of $156.94, which it hit on Mar. 8. Shares of JBL have surged 12.8% over the past three months, outperforming the Technology Select Sector SPDR Fund’s (XLK) marginal rise over the same time frame.
However, in the longer term, JBL shares are down marginally on a YTD basis but have climbed 20.6% over the past year, lagging behind XLK’s 18.1% return on a YTD basis and 40.3% over the past 52 weeks.
JBL has been trading above its 50-day moving average since mid-September and climbed over its 200-day moving average since the last trading session, reinforcing a recent bullish trend.
Despite short-term demand challenges in some end markets, Jabil emphasized its strong positioning over the past year to capitalize on mid-to-long-term growth opportunities across industries such as data center power and cooling, as well as electric and hybrid vehicles.
On Sept. 26, Jabil's stock surged 11.7% following its Q4 earnings report, which beat consensus estimates for both earnings and revenue. Investors were further encouraged by its adjusted core EPS guidance for the full year, projected between $1.65 and $2.05, with the midpoint of $1.85 topping the consensus estimate of $1.83.
Highlighting the contrast in performance, rival TE Connectivity Ltd. (TEL) is up 6.5% in 2024 and has soared 24.1% over the past year, surpassing JBL in the same time frame.
Despite its underwhelming performance compared to the broader tech sector this year, analysts are highly optimistic about JBL’s prospects. The stock has a consensus rating of “Strong Buy” from the eight analysts covering it, and the mean price target of $135 is a 6.6% premium from current levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
