Should JBL Stock Be in Your Portfolio Post Solid Q4 Earnings?
Jabil Inc. JBL enters fiscal 2027 with a stronger growth profile after delivering a solid fourth quarter and issuing an upbeat outlook. In the fourth quarter, revenue rose to $10.6 billion from $8.3 billion, while core EPS climbed to $4.4 from $3.29. Management expects this upward trajectory will likely continue in coming quarters. The company projected fiscal 2027 revenue of $44.5 billion, representing 24% growth, alongside a 30-basis-point expansion in core operating margin to 6.1%. Core EPS is projected to increase 34% to $17.55.
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AI Infrastructure Remains Major Growth Catalyst for JBL
AI infrastructure has become the most important growth engine for Jabil. AI-related opportunity goes beyond traditional server manufacturing and extends across compute, networking, power and cooling components in data centers. Its exposure to AI is not limited to hyperscale data centers. Its capital equipment business is expected to reach $4.2 billion in fiscal 2027, up 40% year over year. Strong demand for automated testing and an anticipated improvement in the wafer-fabrication equipment market are expected to be key contributors.
Networking and communications are becoming another important contributor to the AI infrastructure opportunity. Jabil expects this business to generate $3.9 billion in fiscal 2027 revenues, up 15% year over year. The company is seeing advanced networking program expansion in India, alongside demand for high-speed interconnects and optics.
Diversified Portfolio is a Major Advantage
Jabil is benefiting from strong demand trends in the healthcare and packaging business. The company expects to manufacture more than 700 million injectors and delivery pens during fiscal 2027. It is expected to generate $5.6 billion in fiscal 2027 revenues, up 6%.
Renewable and energy infrastructure revenue is expected to rise 7% to $3 billion in fiscal 2027. Commercial energy projects, energy storage and utility and grid-scale power capabilities are the major drivers in this business.
Jabil is also positioned to benefit from structural changes in the automotive industry. Auto and transportation revenue is expected to increase 9% to $5 billion in fiscal 2027. JBL’s broad capabilities in automotive allow it to venture across evolving vehicle architectures rather than relying exclusively on legacy internal-combustion programs. Warehouse automation, retail automation and robotics also remain a major growth driver.
Jabil’s worldwide manufacturing footprint and connected factory network provide meaningful scale advantages. The company continues to expand capacity in North Carolina, Memphis, India and other locations while maintaining an asset-light model. Ongoing investments in AI, automation and disciplined working capital management improve productivity, support customer ramps and strengthen long-term operating margins without materially increasing capital intensity.
Price Performance
Jabil has gained 50.5% in a year compared with the Electronic Manufacturing Services industry’s growth of 64.5%. It has outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this period.
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Among its competitors, the company has underperformed Flex Ltd. FLEX and Celestica, Inc. CLS. Celestica has increased 64.5%, while Flex has gained 103.5%.
Estimate Revision Trend
Earnings estimates for Jabil for 2026 and 2027 have remained unchanged over the past 60 days.
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Key Valuation Metric of JBL
From a valuation standpoint, JBL appears to be relatively more premium than the industry but below its mean. Going by the price/earnings ratio, the company’s shares currently trade at 17.5 forward earnings, lower than 20.2 for the industry and its mean of 21.5.
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End Note
Jabil’s focus on end-market and product diversification remains a key long-term catalyst. Management continues to target a balanced portfolio so that no individual product or product family becomes an outsized contributor to operating income or cash flow. This strategy improves the stability of earnings through industry cycles while allowing the company to capture opportunities across AI infrastructure, healthcare, industrial and automation markets. Its diverse portfolio and global manufacturing footprint boost its competitive edge against its peers such as Flex, Celestica and Sanmina.
Jabil now carries a Zacks Rank #2 (Buy) and a VGM Style Score of A, strengthening its near-term setup. The stock has a Growth Score of B, reflecting its strong earnings and sales growth outlook, while the Momentum Score has improved to A, indicating a more favorable recent price and trading profile. The Value Score of B also suggests a reasonably attractive valuation relative to key benchmarks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
