Back to top

Image: Bigstock

Jabil (JBL) Hits Fresh High: Is There Still Room to Run?

Read MoreHide Full Article

Have you been paying attention to shares of Jabil (JBL - Free Report) ? Shares have been on the move with the stock up 1.5% over the past month. The stock hit a new 52-week high of $59.56 in the previous session. Jabil has gained 38.6% since the start of the year compared to the 22.6% move for the Zacks Computer and Technology sector and the 25.4% return for the Zacks Electronics - Manufacturing Services industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on June 17, 2021, Jabil reported EPS of $1.3 versus consensus estimate of $1.03 while it beat the consensus revenue estimate by 4.49%.

For the current fiscal year, Jabil is expected to post earnings of $5.53 per share on $29.54 billion in revenues. This represents a 91.03% change in EPS on an 8.34% change in revenues. For the next fiscal year, the company is expected to earn $5.95 per share on $30.98 billion in revenues. This represents a year-over-year change of 7.4% and 4.87%, respectively.

Valuation Metrics

Jabil may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Jabil has a Value Score of A. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 10.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 10.5X versus its peer group's average of 10.5X. Additionally, the stock has a PEG ratio of 0.89. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Jabil currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Jabil meets the list of requirements. Thus, it seems as though Jabil shares could have a bit more room to run in the near term.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Jabil, Inc. (JBL) - free report >>

Published in