Jabil Circuit Stock is a Play on Secular Growth Trends

→ SHOCKING Crypto Leak… (From Crypto 101 Media) (Ad)
Jabil Circuit Stock is a Play on Secular Growth Trends Electronics manufacturing services and solutions provider Jabil Circuit NYSE: JBL stock has been on a year since its pandemic bottom formed in March 2020. The explosion in consumer electronics and device usage has been a key growth driver, especially with consumers adopting work-learn-engage at home trends. The maker of electronic circuit boards is a key component provider and supplier to major brands including Apple NASDAQ: AAPL, Amazon NASDAQ: AMZN, Hewlett Packard NYSE: HP, Johnson & Johnson NYSE: JNJ, and Tesla NASDAQ: TSLA. The Company is set to gain on the growth in electronics powered by digital transformation and 5G adoption, constrained by global chip shortage of 2021. The re-openings are being accelerated from COVID vaccinations. Prudent investors looking to capture gains from the momentum in secular growth trends in healthcare, automotive and 5G adoption can monitor shares of Jabil Circuit for opportunistic pullbacks.

Q2 Fiscal 2021 Earnings Release


On March 16, 2021, Jabil reported its Q2 fiscal 2021 results for the quarter ending February 2021. The Company reported earnings-per-share (EPS) of $1.27 versus consensus analyst estimates for $0.82, a $0.45 beat. Revenues grew 11.5% year-over-year (YoY) to $6.83 billion, beating analyst estimates for $6.39 billion. Diversified Manufacturing Services (DMS) revenues grew 26% while Electronics Manufacturing Services (EMS) revenues fell (-1%) YoY. The Company generated $20 million in Q2 and capex, net of customer co-investments, of $152 million. Global credit facilities totaled $3.8 billion for total available liquidity of $4.6 billion. The Company bought back 1.9 million shares at a cost of $82 million and still has $254 million remaining under the buyback authorization expected to be completed by 2H 2021.

Jabil Raises Forecasts

The Company raised its Q3 EPS guidance to a range of $0.90 to $1.00 versus $0.87 analyst estimates. Revenues are expected to come in between $6.6 billion to $7.2 billion compared to $6.33 billion consensus analyst estimates. Jabil raised full-year fiscal 2021 EPS guidance to $5.00 versus $3.94 analyst estimates and revenue guidance to $28.5 billion versus $26.98 billion analyst estimates.

Conference Call Takeaways

Jabil CEO Mark Mondello set the tone, “Today, our business is wide-ranging and resilient; this is especially true when any individual product or product family is faced with a macro disruption of cyclical demand. Furthermore, our current business mix provides a unique set of capabilities, innovative capabilities openly shared across the enterprise with speed and precision as we simplify the complex for our customers. It’s a proven formula that’s trusted by many of the world’s most remarkable companies.” CEO Mondello went on to point out the efforts of the past several years have enabled the Company to expand its industry segment base and align with secular trends including 5G, personalized healthcare, digital learning, electric vehicles, cloud computing, clean energy, and eco-friendly packaging.

Secular Trends Driving Growth

Jabil CFO Mike Dastoor summed up the long-term secular trends that will drive growth for many years to come. In healthcare, companies are shifting from manufacturing to connected product solutions. In the automotive industry, electric vehicles are a major driver making up only 2% of total vehicles currently, “Climate change, fuel efficiency, and emissions are ongoing concerns and regulatory policies worldwide are beginning to mandate more eco-friendly technologies.” The adoption of 5G is accelerating, “5G will transform the way we live, work, play and educate. As the underlying infrastructure continues to roll out.” This also contributes to further migration and expansion of the cloud, “This, coupled with the value proposition Jabil offers to cloud hyperscalers, is helping up grow market shares in an expanding market, evidenced by the significant growth over the last three years.”  

Jabil Circuit Stock is a Play on Secular Growth Trends

JBL Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for JBL stock. The weekly rifle chart uptrend peaked out below the $56.05 Fibonacci (fib) level. Shares fell under the 5-period moving average (MA) support at $53.50 as the weekly stochastic peaked near the 100-band and cross down. The weekly 15-period MA sits near the $48.73 fib. The daily stochastic formed a stochastic mini inverse pup on the market structure high (MSH) trigger break under $53.23. The daily market structure low (MSL) buy triggered on the $44.18 breakout in March 2021. The daily Bollinger Bands (BBs) have been contracting but are now starting to expand which signaling a larger price range is forming likely in lower. This can provide opportunistic pullback levels at the $48.78 fib, $46.18 fib, $44.29 fib, $42.76 fib, $40.08 fib, and the $38.20 fib. Upside trajectories range from the $58.90 fib up towards the $66.46 fib level. Keep an eye on peer stocks SANM and CLS as they tend move together as a group.

→ SHOCKING Crypto Leak… (From Crypto 101 Media) (Ad)

Should you invest $1,000 in Jabil right now?

Before you consider Jabil, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Jabil wasn't on the list.

While Jabil currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Investing Strategies To Help Grow Your Retirement Income Cover

Need to stretch out your 401K or Roth IRA plan? Use these time-tested investing strategies to grow the monthly retirement income that your stock portfolio generates.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Jabil (JBL)
3.9473 of 5 stars
$120.89+1.5%0.26%10.38Buy$144.50
Helmerich & Payne (HP)
2.4043 of 5 stars
$42.33+2.7%2.36%10.10Reduce$42.88
Apple (AAPL)
4.8749 of 5 stars
$166.90+0.6%0.58%26.00Moderate Buy$203.05
Tesla (TSLA)
4.8634 of 5 stars
$144.68+1.9%N/A33.57Hold$194.70
Johnson & Johnson (JNJ)
4.8988 of 5 stars
$149.56+0.3%3.18%9.32Hold$175.86
Compare These Stocks  Add These Stocks to My Watchlist 

Jea Yu

About Jea Yu

  • JeaYu21@gmail.com

Contributing Author

Trading Strategies

Experience

Jea Yu has been a contributing writer for MarketBeat since 2018.

Areas of Expertise

Equities, options, ETFs and futures; fundamental, qualitative, quantitative and technical analysis and pattern identification; active and swing trading; trading systems and methodology development

Education

Bachelor of Arts, University of Maryland, College Park

Past Experience

U.S. equity markets trader, writer and analyst for over 25 years. Published four books by publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. Speaker at various expos and seminars and has been quoted and featured in USA Today, The Wall Street Journal, Traders Magazine, The Financial Times and various trade publications, including Stocks & Commodities, Active Trader and Online Investor.


Featured Articles and Offers

Easy Growth Over for Tesla, Stock Driving Lower

Easy Growth Over for Tesla, Stock Driving Lower

As Tesla approaches its Q1 earnings amid a turbulent period, we dive deep into what investors can expect.

Search Headlines: