Simple Concepts Research Group

Here’s What You Should Know Before Buying Jabil (NYSE: JBL)

by | May 23, 2022 | 52 Week Lows, Stock Picks

jabil jbl stock valuation

Jabil Inc. (JBL) Company Overview & Stock Price Forecast

This article provides a brief analysis and stock rating for Jabil Inc. (JBL) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.

Jabil Inc. Fundamentals

JBL Stock Rating

Stock Price Target: $71.29

In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Jabil Inc. in comparison to the Electronics industry and the S&P 500.

Jabil Inc. is a Mid-Cap company with a Market Cap of $7.85B.

How are investors using Jabil Inc. earnings yield to assess the company?

Jabil Inc. (JBL)_ Earnings Yield in Comparison to the Electronics Industry, S&P 500 and 10 Year Treasury Rate

The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).

The current earnings yield for Jabil Inc. is 15.85%, in comparison to 5.07% for the S&P 500 and 2.78% for the 10-year treasury bond. The median earnings yield for the Electronics industry is 6.01%.

What does Jabil Inc. Price-to-Earnings Ratio (P/E) tell investors about the company?

Jabil Inc. (JBL)_ Price-to-Earnings, Price-to-Sales and Price-to-Book Value in Comparison to the Electronics Industry and the S&P 500

The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings. 

Jabil Inc. is currently trading at a P/E of 10.60. The P/E for the Electronics industry is 15.67 and the P/E for the S&P 500 is 19.72.

What is the current Price-to-Sales Ratio (P/S) for Jabil Inc.?

The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.

Jabil Inc. is currently trading at a P/S of 0.29. The P/S for the Electronics industry is 2.70 and the P/S for the S&P 500 is 2.49.

How does Jabil Inc. Price-to-BookRatio (P/B) compare to the Eletronics industry?

Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.

Jabil Inc. P/B ratio is 3.89. The P/B for the Electronics industry is 4.54 and the P/B for the S&P 500 is 3.87.

How attractive is Jabil Inc. Return on Invested Capital (ROIC) to investors?

Jabil Inc. (JBL)_ Return on Invested Capital in Comparison to the Electronics Industry and the S&P 500

Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.

Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.

Jabil Inc. ROIC is currently 15.84% in comparison to 10.34% for the Electronics industry and 9.10% for the S&P 500.

Jabil Inc. (JBL)_ Price Target & 52-Week Price Range

How has JBL stock performed over the past year? What is the current analyst price target?

Over the past 52 weeks, Jabil Inc. has traded between the range of $52.43 and $72.11.

The current Analyst Price Target for Jabil Inc. is $71.29.

What is Jabil Inc. YOY Performance in comparison to its industry and the total market?

The YOY performance for Jabil Inc. is 5.72%. The Electronics industry has a YOY performance of -10.72% in comparison to the YOY S&P 500 performance of -5.49%.

Jabil Inc. (JBL)_ YOY Performance in Comparison to the Electronics Industry and the S&P 500

Recent Financial Results (Q2, 2022)

  • Net revenue of $7.6B
  • Diversified Manufacturing Services (DMS) year-on-year revenue growth of 4%
  • Electronics Manufacturing Services (EMS) year-on-year revenue growth of 19%
  • U.S. GAAP operating income of $313M
  • Core operating income (Non-GAAP) of $344M

Stock Price Target: $71.29

Company Overview

JBL Stock Rating

Jabil Inc. provides manufacturing services and solutions worldwide. The company operates in two segments, Electronics Manufacturing Services and Diversified Manufacturing Services. It offers electronics design, production, and product management services. The company provides electronic design services, such as application-specific integrated circuit design, firmware development, and rapid prototyping services; and designs plastic and metal enclosures that include the electro-mechanics, such as the printed circuit board assemblies (PCBA).

It serves 5G, wireless and cloud, digital print and retail, industrial and semi-cap, networking and storage, automotive and transportation, connected devices, healthcare and packaging, and mobility industries. The company was formerly known as Jabil Circuit, Inc. and changed its name to Jabil Inc. in June 2017. Jabil Inc. was founded in 1966 and is headquartered in Saint Petersburg, Florida.

Be sure to add Jabil Inc. (JBL) to your Watch List and if you haven’t done so already, check in on the performance of our Current Portfolio. Keep it simple and always do your due diligence.

This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.