Jabil Evaluates Buyback Potential with $1 Billion FCF Estimate for FY24

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Jabil Inc ($NYSE:JBL). is a global provider of electronics manufacturing services and solutions. It offers products and services ranging from electronics engineering and design to global supply chain management and aftermarket services, to meet customers’ needs. Recently, the company has been evaluating the potential of a $1 billion buyback in the fiscal year of 2024, and has estimated that this could increase their free cash flow. The company’s financial position has given them the opportunity to consider a buyback program, as they have a strong balance sheet supported by a healthy cash flow. Analyzing the impact that a $1 billion buyback could have on its FY24 free cash flow estimates, Jabil will have to consider not only the potential benefits but also any negative consequences that could arise from such a decision. With the estimated increase in free cash flow, Jabil could use this money to invest in its operations, expand its customer base, and accelerate growth.

Additionally, it could also use the cash to reduce its debt and improve its financial position. The company must also consider the potential risk associated with a $1 billion buyback. If the stock price dips, then it could result in capital losses for the company and reduce the value of its shares. In conclusion, Jabil is carefully evaluating the potential impact of a $1 billion buyback on its FY24 free cash flow estimates. The potential benefits of this buyback must be weighed against any potential risks and consequences that could arise from such a decision. It remains to be seen what action the company will ultimately take.

Price History

On Thursday, JABIL INC stock opened at $126.0 and closed at $125.0, down by 1.8% from the previous closing price of 127.4. This decline came as the company evaluated its potential to buy back shares with an estimated 1 billion in free cash flow (FCF) for fiscal year 2024. This estimate is based on steady growth in earnings, margins and cash flow.

JABIL INC plans to use this cash to return value to shareholders through share buybacks, dividends and other financial initiatives. The company also plans to use the funds for investments in organic and inorganic opportunities in order to strengthen its core business and create long-term value for shareholders. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Jabil Inc. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Jabil Inc. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Jabil Inc. More…

Key Ratios Snapshot

Some of the financial key ratios for Jabil Inc are shown below. More…

Analysis

GoodWhale conducted an analysis of JABIL INC‘s wellbeing in order to better understand the company’s financial stability. We were pleased to find that JABIL INC has a high health score of 8/10 according to our Star Chart analysis, indicating that they are more than capable of riding out any crisis without the risk of bankruptcy. JABIL INC is particularly strong in dividend and growth, exceeding expectations in both areas. They also show moderate strength in asset and profitability, which we consider to be in line with industry standards. Based on these findings, we classify JABIL INC as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. Given the health of JABIL INC, we believe that value investors who are looking for steady dividends and moderate growth may be particularly interested in this company. Those who are seeking more rapid gains may want to look elsewhere, however. More…

Peers

It is headquartered in St. Petersburg, Florida, and it has been in business since 1966. The company has more than 100,000 employees, and its revenue was $17.9 billion in 2017. Jabil Inc‘s main competitors are Flex Ltd, Venture Corp Ltd, and Suzhou Etron Technologies Co Ltd.

– Flex Ltd ($NASDAQ:FLEX)

Flex Ltd is a leading manufacturer of electronic components and assemblies. The company has a market capitalization of 7.97 billion as of 2022 and a return on equity of 18.46%. Flex Ltd is a diversified company that operates in a variety of industries, including automotive, consumer electronics, communications, computing, and industrial. The company has a strong global presence and is headquartered in Singapore. Flex Ltd is a publicly traded company on the Singapore Stock Exchange.

– Venture Corp Ltd ($SGX:V03)

Venture Corp Ltd is a Singapore-based company that provides electronic manufacturing services. The company has a market cap of 4.64B as of 2022 and a Return on Equity of 12.65%. The company’s primary businesses are in the areas of original design manufacturing, precision engineering, and electronics manufacturing services. The company also provides value-added services such as product development, assembly, and testing.

– Suzhou Etron Technologies Co Ltd ($SHSE:603380)

As of 2022, Suzhou Etron Technologies Co Ltd has a market cap of 4.81B and a Return on Equity of 13.48%. The company is engaged in the research, development, production and sales of optoelectronic products and solutions. The company’s products are used in a wide range of applications, including telecommunications, data communications, consumer electronics, automotive electronics, industrial electronics and medical electronics.

Summary

Jabil Inc. is under the spotlight for its planned buyback of up to $1 billion of its common stock over the next fiscal year. The analysis also concluded that the company’s strong balance sheet and low debt levels provide ample liquidity to fund the buyback. Moreover, the company’s dividends are well-covered by its free cash flow, allowing it to return a majority of its income to shareholders via buybacks and dividends. Overall, investing in Jabil Inc. appears to be a good decision for investors seeking long-term growth.