JBL - Embedded Expectations Analysis - 2021 07 29
Jabil Inc. (JBL:USA) currently trades below recent averages relative to UAFRS-based (Uniform) earnings, with a 14.5x Uniform P/E. Even at these levels, the market is pricing in bullish expectations for the firm, but management may be concerned about their top line strength, their healthcare vertical, and the EMS segment.Specifically, management may lack confidence in their ability to achieve their revenue outlook for the year, sustain top line strength across different sectors, and align with customer interests. Additionally, they may be exaggerating their focus on their health care vertical, particularly diagnostics, and the potential of their collective company capabilities. Moreover, they may have concerns about investments in the electronics manufacturing services (EMS) segment as well as its market size, and the sustainability of leverage benefits from top line growth. Finally, they may be overstating the benefits of their scale, the potential of their 5G cloud wireless portfolio, and the efficiency of their IT systems.
Jabil is a provider of manufacturing services and solutions. The company provides electronics design, production and product management services to companies in various industries and end markets. The company's manufacturing and supply chain management services and solutions include design, planning, fabrication and assembly, delivery and managing the flow of resources and products. The company's segments include: Electronics Manufacturing Services, which utilizes information technology, supply chain design and engineering, technologies centered on primary electronics; and Diversified Manufacturing Services, which provides engineering solutions, with a focus on material sciences, technologies and healthcare.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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