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Jabil (NYSE:JBL), which has surged over 10% in the past week and is trading near its 52-week high of $203.90, received a price target increase from UBS on Wednesday, with the firm raising its target to $208.00 from $157.00 while maintaining a Neutral rating on the stock. According to InvestingPro analysis, the stock appears to be trading above its Fair Value. The significant boost follows Jabil’s strong performance in its Cloud/Data Center Infrastructure business, which experienced 51% growth, substantially exceeding UBS’s 23% estimate.
The company reported total revenue of $7.8 billion, representing approximately 19% growth on a pro forma basis, outpacing UBS’s projection of about 8%. UBS identified strong artificial intelligence-related investments in custom ASICs at Jabil’s largest customer as the primary driver of the revenue outperformance, partly due to what appears to be a strengthened relationship following an equity warrant transaction.
Despite the revenue strength, Jabil’s gross margin came in at 8.7%, approximately 30 basis points below UBS expectations. This aligns with InvestingPro data showing consistently weak gross profit margins of 8.94% over the last twelve months. The company maintained its full-year operating margin guidance at 5.4% despite the revenue upside, with UBS noting that volume ramps are creating some margin pressure.
UBS expects Jabil’s "Intelligent Infrastructure" demand to remain strong, with August 2025 Intel (NASDAQ:INTC) revenues projected to increase approximately 42% year-over-year. The firm also highlighted that Silicon Photonics continues to ramp up at Jabil, albeit from a smaller base, supporting a strong August revenue outlook.
The stock currently trades at approximately 20 times UBS’s next-twelve-month earnings per share estimate, while InvestingPro data shows a current P/E ratio of 35.36x. UBS believes future stock performance will likely be driven by earnings per share revisions rather than multiple expansion, with AI-driven volume increases serving as the key near-term catalyst for the stock. InvestingPro subscribers have access to 18 additional key insights about Jabil, including detailed margin analysis and growth metrics, available in the comprehensive Pro Research Report.
In other recent news, Jabil Circuit Inc. reported strong financial results for its third fiscal quarter of 2025, significantly exceeding both earnings and revenue forecasts. The company announced an earnings per share (EPS) of $2.55, surpassing the expected $2.29, while revenue reached $7.8 billion, exceeding the anticipated $7.03 billion. Jabil also raised its full-year revenue guidance to approximately $29 billion, driven by strong demand in AI-related markets. Barclays (LON:BARC) responded to these developments by raising Jabil’s stock price target to $223, maintaining an Overweight rating, and highlighting the company’s strength in its Cloud and Data Center segments. Additionally, Jabil increased its artificial intelligence revenue guidance to $8.5 billion and announced plans for a new U.S. manufacturing site to support growth in its Cloud and Data Center operations. While the Electric Vehicle, Renewables, and 5G segments remain subdued, the Healthcare segment continues to perform well. The company also plans to invest approximately $500 million in the new U.S. site to expand its capabilities, expected to be operational by mid-2026.
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