Jabil Quietly Manufactures an Accelerating Stock Price Rally

Key Points

• Jabil Inc. is positioned to accelerate growth in 2026 and extend it into the subsequent fiscal year as AI drives demand.
• Growth and cash flow point to aggressive share buybacks and a resulting uptrend in share price.
• Analysts and institutional trends are bullish, providing support for this market and driving it in 2026.

Jabil Inc. NYSE: JBL is critical to the tech industry, as it is a leading manufacturer and provider of manufacturing services for technology companies. Its top customers include Apple NASDAQ: AAPL, Amazon NASDAQ: AMZN, Cisco NASDAQ: CSCO, Ericsson NASDAQ: ERIC, and Tesla NASDAQ: TSLA, which rely heavily on it for components and services.

This now-diversified business sustains and accelerates a return to growth that underpins a robust capital return program. The combination promises to reduce the share count by mid-single-digit percentages annually and by double-digit percentages over the longer term, setting the stage for this stock to continue moving higher. 

Share buybacks are significant, more than offsetting the lack of dividend distribution.

The fiscal Q2 2026 activity resulted in a 3.7% quarterly drop in the average count and a 4.4% decline year to date (YTD), providing significant leverage for investors, but there is an offset.

The buybacks effectively burn cash with no tangible return, increase treasury shares, and negatively impact equity. 

However, the fiscal Q2 and full-year declines are minimal despite the buybacks, with the increased treasury share value more than offsetting the equity reduction. In this light, the company is reducing its share count faster than buybacks reduce equity, thereby providing dual leverage for investors. 

Jabil’s Value Is Deep

This stock trades at a 22X its current year earnings forecast as of mid-March, fairly valued relative to the S&P 500 but at a discount relative to long-term forecasts, given the growth outlook, operational quality, and capacity for share repurchases. Looking forward, the 2030 forecasts suggest this stock is approximately 50% undervalued and could rise by $130 or more over the coming years. 

Analysts aren’t entirely bullish on this stock, but the data reveal that a bullish revision cycle is in progress, strengthened by the recent earnings release. The first revisions include an increased price target from J.P. Morgan Chase & Co. and initiation of coverage from Baird. Together, they rate the stock as a Strong Buy/Overweight equivalent with a price target near $287.50. This is above the consensus, indicates potential for a new all-time high, and is likely to be followed by higher price targets later in the year. The critical details are that the trend is strong, with coverage increasing, sentiment firming, and the price target revisions supporting the action. 

Jabil Impresses Market With Beat and Raise Quarter

Jabil had a strong quarter with growth underpinned by broad-based strengths. Revenue of $8.28 billion was up 23% year over year (YOY), reversing last year’s contraction as growth accelerated for the fourth sequential quarter. Intelligent Infrastructure was strongest, underpinned by Cloud, Datacenter, Networking, and Communications Equipment, with improvements in Regulated Industries such as Automotive and Renewables noted. 

Margin news was also good. The company widened its margins across all levels, aided by revenue leverage and operational quality, leaving gross margin up approximately 500 basis points (bps) and adjusted earnings up approximately 39%. More importantly, the adjusted earnings outpaced MarketBeat’s reported consensus by 18 cents, or 710 bps, underpinning its capital return outlook and improving the growth and profitability outlook. 

Jabil’s guidance is another factor underpinning the stock price outlook. The company raised guidance not only for Q3 revenue and earnings but for the year, putting both ranges well above the existing consensus estimates. At face value, the guide affirms an outlook for continued acceleration, but there is another catalyst as well. In this scenario, Jabil’s guidance is likely to be cautious, and outperformance could be reported. 

Institutional Data Aligns With Jabil’s Uptrend: They Buy Dips

The institutional data aligns with Jabil’s uptrend, suggesting the group is buying the post-release price dip. The data show they own more than 90% of the stock, bought on a trailing 12-month basis, and have extended the trend in early 2026. This provides a tailwind for price action, limiting downside risk, with strong support at the long-term 150-day exponential moving average. Assuming this support continues to hold, Jabil’s March price pullback is unlikely to get far, and the uptrend will resume before mid-year. 

Catalysts include the impact of AI on the business and operational quality. AI is driving demand across segments, centered on infrastructure, and is expected to remain robust as the year progresses, potentially strengthening at the same time. Meanwhile, AI is being used to improve operational efficiency across the manufacturing footprint, expected to drive long-term margin and earnings improvements.