Jabil Posts Mixed Q4 Results; Shares Fall 6.1%

Jabil, Inc. (JBL) reported mixed results for the fiscal fourth quarter of 2021, topping earnings estimates, but falling slightly short of revenue expectations due to ongoing supply constraints.

Shares of Jabil dropped 6.1% to close at $57.23 on September 29 following the news but gained 2.3% in the extended trading session on optimistic Fiscal 2022 guidance.

Markedly, shares of the global manufacturing solutions provider with operations across 100 plants in 30 countries have risen 67% over the past year. (See Jabil stock charts on TipRanks)

Encouragingly, Q4 adjusted earnings of $1.44 per share grew 47% year-over-year and beat analysts’ expectations of $1.38 per share. Comparatively, the company reported earnings of $0.98 per share in the prior-year period.

However, net revenues grew 1.5% year-over-year to $7.4 billion and were short of consensus estimates of $7.67 billion. Segment-wise, Diversified Manufacturing Services revenues grew 10%, whereas Electronics Manufacturing Services declined 6% year-over-year.

Jabil Issues Guidance for Q1 and Fiscal 2022

Based on the Q4 results, management provided financial guidance for the first quarter and full-year of Fiscal 2022.

For Q1, the company forecasts adjusted earnings in the range of $1.70 to $1.90 per share, while the consensus estimate is pegged at $1.75 per share. Furthermore, revenues are forecast to grow 5% year-over-year to between $8 and $8.6 billion, versus the consensus estimate of $8.25 billion.

For Fiscal 2022, the company forecasts core EPS of $6.35 and net revenues to grow 7.5% to $31.5 billion.

CFO Mike Dastoor commented, “As we move ahead, the momentum within our business is expected to continue into FY22.”

Dastoor further added, “In a world where increasingly complex hardware needs to be built, Jabil is incredibly well-positioned to benefit from secular growth we’re experiencing across vehicle electrification, connected healthcare and infrastructure development, to name a few.”

Following the Q4 results, Stifel Nicolaus analyst Matthew Sheerin upgraded Jabil from Hold to Buy and increased the price target from $63 to $68 (18.8% upside potential).

Sheerin said, “We see the pullback in shares post earnings (6% vs. flat for the S&P) as a buying opportunity, particularly given Jabil’s robust outlook for FY22.”

Sharing his views on the upside, the analyst added, “Driving that growth are programs in higher-margin end markets where Jabil has made significant investments, including auto/transportation (expected to grow 41% in FY22), healthcare, industrial and cloud.”

Consensus among analysts is a Moderate Buy based on 2 unanimous Buys. The average Jabil price target of $74 implies 29.3% upside potential to current levels.

JBL scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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