On Jun 27, 2014, Zacks Investment Research upgraded Jabil Circuit Inc JBL to a Zacks Rank #1 (Strong Buy). With a strong return of 22.6% over the past one year, improving outlook and a positive estimate revision trend, Jabil is an attractive investment opportunity.
Why the Upgrade?
The upgrade was primarily based on better-than-expected third-quarter 2014 results. Although Jabil reported a loss of 13 cents per share, it was narrower than the Zacks Consensus Estimate. Revenues of $3.79 comfortably beat the Zacks Consensus Estimate. Read: Jabil Q3 Loss Narrower-than-Expected; 2015 Outlook Positive
Jabil expects net revenue to be in the range of $3.7 to $3.9 billion for the fourth quarter of fiscal 2014. The company expects to report loss of 10 cents or earnings of 10 cents for the fourth quarter.
Although the Blackberry disengagement is expected to affect the results over the next couple of quarters, we believe that strong performance from the Nypro acquisition, higher restructuring benefits and customer wins will boost overall results in 2015.
Jabil forecasts fiscal 2015 earnings to be in the range of $1.65 to $1.95 per share, driven by improving business trends and new bookings. The company is expected to benefit from the upcoming launch of Apple's AAPL iPhone 6.
Positive Estimate Revisions
The Zacks Consensus Estimate for fiscal 2014 surged 43.8% (14 cents) to 46 cents per share as most of the estimates were revised higher over the last 7 days. For fiscal 2015, the Zacks Consensus Estimate increased 2.1% (3 cents) to $1.48 per share.
The long-term expected earnings growth rate for Jabil is 12.0%.
Other Stocks to Consider
Investors interested in technology stocks may consider Ciena Corp CIEN and Brightcove Inc BCOV. All these stocks sport a Zacks Rank #1.
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