Investing.com — UBS upgraded Jabil to Buy from Neutral, citing stronger AI-driven demand and a more diversified business mix. The bank kept its $430 price target, implying about 28% upside, while raising its fiscal 2027 and 2028 EPS estimates to $16.78 and $20.24 from $15.89 and $18.34, respectively.
UBS expects AI-related revenue to grow at least 50% in fiscal 2027 to about $20.3 billion, supported by capacity expansion in Memphis and North Carolina and growing demand from major hyperscalers including Amazon, Meta and Google. The bank also sees additional growth from the Hanley acquisition and stronger demand for data-center infrastructure.
Jabil is also positioned to benefit from rising healthcare demand as its Croatia facility comes online, while investments in automation and robotics should improve the company’s growth and margin profile. UBS expects operating margin to rise to about 6% in fiscal 2027 from an estimated 5.8% in fiscal 2026.
UBS raised its fiscal 2027 and 2028 revenue estimates by about 6% and EPS estimates by 6% and 10%, respectively, following supply-chain checks pointing to stronger demand. Amazon and Meta are expected to contribute roughly $1 billion each in incremental revenue, while a third hyperscaler, which UBS believes is Google, should provide another growth tailwind later in fiscal 2027.
The bank said the current valuation does not fully reflect its growth outlook, with the shares pricing in an estimated 9.5% 10-year EPS growth rate versus UBS’s roughly 11% forecast. UBS maintained its $430 target despite lowering the valuation multiple to about 22 times from 25 times to account for higher capital costs and a broader de-rating across AI infrastructure stocks.
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