Jabil (JBL) Stock Forecast & Price Target

Jabil Inc has demonstrated a positive outlook driven by a projected increase in AI-related revenue estimates to approximately $6.5 billion, with significant contributions from both semi-cap and cloud infrastructure sectors. The company reported a year-over-year sales growth of around 1%, despite a substantial headwind from the divestiture of its mobility business, indicating resilience in its core segments and the ability to adapt to changing market dynamics. Additionally, Jabil's management anticipates maintaining sales and earnings targets of $27 billion and $8.65 per share for FY25, supported by strong demand for cloud and data center infrastructure, program wins with major customers, and ongoing cost optimization efforts, which are further expected to enhance operating margins in the latter half of the fiscal year.

Jabil's financial outlook appears negative due to a decline in adjusted operating margin, which fell by 80 basis points quarter-over-quarter and 99 basis points year-over-year, resulting in a current margin of 5.0%. The company has lowered its fiscal year 2025 segment sales guidance to $12.0 billion, down from an initial estimate of $12.2 billion, reflecting an overall year-over-year decline of 2% and significantly impacted by weakening demand in the automotive and renewable energy sectors. Additionally, Jabil's gross margin has decreased by 86 basis points quarter-over-quarter and 58 basis points year-over-year to 8.7%, indicating difficulties in maintaining profitability amid declining volumes and mixed market conditions.