Shares of manufacturing services provider Jabil (NYSE:JBL) tanked nearly 9% at the time of writing after the company slashed its financial outlook due to weak demand.
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Kenny Wilson, the company’s CEO, commented, “During the final stretch of our first quarter, we experienced softening in demand as a result of short-term inventory corrections across certain end-markets where we participate.”
As a result, the company now anticipates revenue for the first quarter to hover between $8.3 billion and $8.4 billion, compared to the previous outlook of between $8.4 billion and $9 billion. Core EPS during the quarter is seen landing near the midpoint of the prior range of $2.40 to $2.80. Further, revenue for the second quarter is anticipated to be between $7 billion and $7.6 billion.
For Fiscal Year 2024, the company now expects revenue of $31 billion, which is 7% lower than its prior guidance. In addition, core EPS for the year is anticipated to come in at $9. Despite this guidance cut, Bank of America Securities’ Ruplu Bhattacharya has reiterated a Buy rating on the stock while increasing the price target to $145 from $135.
Jabil is slated to report its first-quarter results on December 19. Analysts expect the company to deliver an EPS of $2.63 on revenue of $8.74 billion. In the comparable year-ago period, Jabil’s EPS of $2.31 had fared better than the Street’s estimates by $0.07.
What is the Target Price for JBL?
Overall, the Street has a Strong Buy consensus rating on Jabil. Following a nearly 89% jump in the company’s share price over the past year, the average JBL price target of $143.80 implies a 21.9% potential upside in the stock.
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