Jabil stock is Monday's pick for IBD 50 Growth Stocks To Watch as the manufacturing services name has formed a positive chart pattern. Analysts recently raised their profit estimates on the data center play.
The IBD 50 stock is inching up modestly to start the new week, as it continues to tighten up in light volume. The stock is catching its breath after gaining around 54% so far this year.
Jabil provides contract services spanning engineering, machining, procurement, supply chain and software.
It serves industries including defense and aerospace, automotive, commercial drones, cloud, data centers and health care. The global manufacturing company operates around 100 locations in more than 25 countries.
On June 17, it announced a $500 million multiyear investment to expand its footprint to support cloud and artificial intelligence data center infrastructure customers.
The stock ranks No. 4 out of 17 stocks in the Electronics-Contract Manufacturing group, which holds the 12th spot out of the 197 industry groups that Investor's Business Daily tracks.
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Jabil Stock Tightens Up
Jabil stock soared nearly 9% in heavy volume on June 17 after the company reported better-than-expected earnings for its May-ended quarter and boosted its sales estimates going forward.
The stock's rapid run-up following the earnings release triggered two IBD positive chart markers.
Its 24% climb from its 170.90 cup-with-handle buy point within three weeks activated a power from pivot flag on the MarketSurge chart. It also tripped the IBD ants indicator, due to its greater than 20% price increase during a climb of 12 of 15 consecutive days in above average volume.
Shares topped the 20% profit zone of a 170.90 handle buy point and reached a record high last Wednesday.
The stock formed a three-weeks-tight pattern with an all-time high of 229.16 as the entry point. The highest intraday price of the formation can be a place to add to an existing position, though investors can use it to make an initial purchase.
Data Centers Help Boost Bottom Line
Jabil's fiscal third-quarter earnings grew 35% following a 15% rise and four straight quarters of declines prior to that. Its revenue grew 16% after seven straight quarters of dropping sales.
"We delivered a strong third quarter, outperforming expectations across key end-markets such as cloud, data center infrastructure, and capital equipment," Jabil Chief Executive Mike Dastoor said in the earnings release.
The company raised its fiscal 2025 profit and sales estimates, with both topping views. Also on July 17, it announced that it authorized a share repurchase program of up to $1 billion in common stock.
Analysts recently raised their fiscal 2025 earnings estimates to $9.37 per share. That represents 10% growth after a 2% drop in fiscal 2024. And FactSet estimates now show a 15% profit increase to $10.81 per share for fiscal 2026.
FactSet estimates call for fiscal fourth-quarter revenue to increase an average of around 8% over the next three quarters.
Mutual Funds Bolster Shares
Jabil stock's IBD Accumulation/Distribution Rating of B+ indicates fairly heavy institutional buying over the last 13 weeks.
Mutual funds have bolstered shares, with 1,712 funds owning the stock in June. That's up from 1,652 in March and 1,597 in December. And its 2.1 up/down volume ratio shows positive demand over the last 50 days.
Lastly, its overall high performance earned it a 96 IBD Composite Rating and a 95 Earnings Per Share Rating. The best-possible score in both metrics is 99.
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