To The Moon

$Jabil Circuit(JBL)$ is scheduled to release its fiscal Q3 2025 earnings on Tuesday,17 June 2025, before the market opens.

Earnings Per Share (EPS): Analysts generally expect Jabil to report an adjusted EPS of around $2.28 to $2.30, which would represent a significant increase (approximately 15% to 20%) compared to $1.87 per share in the same period last year. Some reports project around $2.15 per share as well, showing a slight range in consensus.

Revenue: Revenue is projected to be around $7 billion to $7.03 billion, indicating a roughly 4% year-over-year growth from $6.76 billion a year earlier.

Jabil has a strong track record of surpassing earnings expectations, having beaten forecasts in the past four consecutive quarters.

Jabil Inc (JBL) Last Positive Earnings Call Saw Share Price Gained 26.13%

Jabil had a positive call on 20 March 2025 which saw its share price gained 26.13% since.

The earnings call indicated strong performance in key segments and a positive outlook for AI-related business and cash flow generation. However, challenges in the regulated industry and Connected Living & Digital Commerce segments, along with inventory management concerns, necessitate caution. Overall, the positives moderately outweigh the negatives.

Jabil Inc (JBL) Guidance

In the fiscal year 2025 second quarter earnings call, Jabil reported strong results with $6.7 billion in revenue, excluding $250 million from the divested mobility business. Revenue grew by 3% year-over-year, with core operating income at $334 million and a core operating margin of 5%. The regulated industry segment saw revenue of $2.7 billion, down 8% due to weakness in renewable energy and EV markets, yet core margins improved to 4.8%. The Intelligent Infrastructure segment experienced an 18% increase in revenue to $2.6 billion, driven by AI-related demand and achieving a core margin of 5.3%. Connected Living & Digital Commerce revenue declined by 13% to $1.3 billion, impacted by mobility divestiture, though excluding it, revenue grew by 4%. Inventory days rose to 80 days, but decreased year-on-year by 7 days.

Adjusted free cash flow for Q2 was $261 million, contributing to a year-to-date total of $487 million, with expectations for full-year free cash flow to exceed $1.2 billion. The company anticipates Q3 revenue between $6.7 billion and $7.3 billion, with core diluted EPS projected between $2.08 and $2.48. Jabil also highlighted a 40% increase in AI-related revenue, expecting $7.5 billion in FY 2025, and emphasized its strong U.S. manufacturing footprint amid potential tariff challenges.

Key Areas to Watch in the Q3 FY2025 Earnings Report

Revenue Breakdown: Look for performance in key strategic areas. Jabil has been strategically pivoting towards higher-margin segments like automotive and AI. Specifically, AI-related revenue is anticipated to reach $7.5 billion for the full fiscal year 2025, representing a 40% increase. The Q3 report will shed light on how much this segment contributed.

Jabil reported strong Q2 results with $6.7 billion in revenue, a 3% year-over-year increase when excluding the divested mobility business. Core operating income was $334 million with core operating margins at 5%.

Other important sectors include capital equipment, cloud infrastructure, and digital commerce.

The Intelligent Infrastructure segment saw revenue of $2.6 billion, up 18% year-on-year, driven by strong demand in AI-related cloud, data center infrastructure, and capital equipment markets. Core operating margin improved by 110 basis points to 5.3%.

Revenue in the Connected Living & Digital Commerce segment was down 13% year-on-year due to the mobility divestiture. Excluding the divestiture, revenue growth was approximately 4%, but there was weaker demand in consumer-driven connected living products.

Profit Margins: Analysts will be closely scrutinizing Jabil's gross profit and operating profit margins. The strategic shift towards higher-margin businesses is intended to boost profitability, so any improvement in these metrics will be a positive sign.

In Q2 FY2025, Jabil reported a gross profit of $576 million and an operating profit margin of 3.64%. Investors will be looking for continued operational efficiency.

Guidance for Q4 and Full Year FY2025: Beyond the Q3 numbers, the company's outlook for the upcoming quarter (Q4 FY2025) and its reaffirmation or revision of full-year fiscal 2025 guidance will be crucial. This will provide insights into management's confidence in future performance and market conditions.

AI-associated business is projected to represent approximately $7.5 billion in revenue for FY 2025, marking a 40% year-on-year increase.

Strategic Initiatives and Partnerships: Any updates on recent strategic moves, such as the Memorandum of Understanding (MOU) with AVL Software and Functions GmbH to expand its footprint in the automotive and transportation sectors, will be of interest.

Information on AI integration and other technological advancements will also be closely watched. Jabil is well-positioned to navigate potential tariffs with a significant U.S. manufacturing footprint and plans to expand its operations in India to support photonics capabilities.

The regulated industry segment reported a revenue decrease of 8% year-over-year due to expected weakness in the renewable energy and EV markets.

Inventory days increased by 4 days sequentially to 80 days, with net inventory days slightly above the targeted range due to timing within the Intelligent Infrastructure segment.

Balance Sheet and Liquidity: Investors will assess the company's financial health, including its debt-to-equity ratio, current ratio, and overall liquidity. As of February 28, 2025, Jabil had over $6.2 billion in total liquidity, including $1.6 billion in cash.

Adjusted free cash flow for the quarter was $261 million, with a year-to-date adjusted free cash flow of $487 million. The company repurchased 2.5 million shares and plans to complete its $1 billion share repurchase authorization by FY 2025.

The company remains cautious about the EV and renewable energy markets, with expectations of continued caution in these areas for the fiscal year.

Jabil Inc (JBL) Price Target

Based on 8 analysts from Tiger Brokers offering 12 month price targets for Jabil in the last 3 months. The average price target is $179.14 with a high forecast of $206.00 and a low forecast of $154.00. The average price target represents a 1.88% change from the last price of $175.84.

Overall, analyst sentiment towards JBL remains positive, with many maintaining "Buy" or "Overweight" ratings. Recent price target revisions from firms like Goldman Sachs and Barclays suggest continued confidence in the stock's potential upside.

Technical Analysis - Exponential Moving Average (EMA)

The stock has significantly outperformed market indices, with a 22.3% surge over the past year. Jabil have been building a pretty strong momentum after April, and the bulls are in nice control in the daily uptrend.

We should be able to see this daily uptrend continuation going stronger into the earnings, and we might even see a nice price surge or gap up if the earnings beat estimate and gave a surprise.

The current price might be a bit high for entry, and I would be looking at the 26-EMA level at around $168 for comfortable share entry.

Summary

The market expects Jabil to deliver a solid Q3 FY 2025 earnings report, driven by strong performance in diversified manufacturing services and strategic growth in areas like AI and automotive. The focus will be on whether the company meets or exceeds these optimistic projections and provides a confident outlook for the remainder of the fiscal year.

Considering the challenges posed by the geopolitical tensions and also tariffs, now corporate organization might look into readjusting their budget spending on AI, and also automotive demand might slowed down, I would be looking at Jabil guidance for fiscal year 2025 to see if there is any positive or negative revisions.

Appreciate if you could share your thoughts in the comment section whether you think Jabil would continue to enjoy healthy growth and with its strong financial health with cash flow, they would be in a better position to capture any opportunity that might present.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.