Apple supplier Jabil upgraded at Argus after strong results, raised outlook

Investing.com -- Argus Research upgraded its intermediate-term rating on Jabil Inc. to Buy from Hold following a better quarterly results and a raised outlook for fiscal 2025, citing renewed top-line growth and improving margins.

Electronics manufacturing services company reported a 16% jump in third-quarter revenue to $7.83 billion, well above both internal guidance and Wall Street estimates. Adjusted earnings rose 35% to $2.55 per share, also beating forecasts.

Jabil has now raised its annual revenue and profit forecasts for the third time since last September, reversing earlier expectations for a decline.

The company attributed the improved outlook to recovering demand across key markets, particularly in cloud and artificial intelligence infrastructure

Argus said Jabil appears well positioned heading into fiscal 2026 given the new business opportunities in connected healthcare, semiconductor equipment, and AI data centers.

It also noted that the sale of the company’s high-cost mobility segment last year had helped improve overall margins.

Shares of Jabil has jumped since earnings report and are up 37% so far this year, outperforming peers.

Argus highlighted structural changes under CEO Mike Dastoor, who replaced Kenny Wilson in May 2024.

The company has reorganized operations into three new business segments and is investing in U.S. capacity, including a planned $500 million spend aimed at AI-related manufacturing.

Argus maintained its long-term Buy rating on the stock and set a price target of $230.

While the outlook for AI and cloud infrastructure remains strong, the company noted ongoing softness in electric vehicles, renewable energy, and 5G mobility.

Still, management said it expects record adjusted earnings this year, driven by improved operating discipline and capital allocation.