Jabil upgraded by UBS as AI demand, healthcare growth support outlook

Jabil Inc (NYSE:JBL) shares gained about 5% on Tuesday afternoon after UBS upgraded the stock to 'Buy' and raised its estimates, citing a multiyear growth cycle driven by artificial intelligence investment, healthcare demand and expanding automation and robotics markets. UBS set a $430 price target, implying roughly 22% upside from the stock's current level. The firm lowered the valuation multiple underpinning its target to about 22 times earnings from 25 times, reflecting what it described as a broad-based de-rating across the AI infrastructure system. UBS expects Jabil's AI-related revenue to grow at least about 50% in fiscal 2027 to roughly $20.3 billion. The firm said recent checks point to capacity expansion in markets including Memphis and North Carolina, while product road maps at key customers such as Amazon and Meta could support faster growth than previously expected. UBS also pointed to Amazon Web Services' chip business as a potential driver. The firm expects Jabil's healthcare business to benefit as capacity comes online at its Croatia facility, which has been repurposed for healthcare customers. UBS expects the shift toward higher-margin products, including GLP-1 drugs, along with increased volume to accelerate revenue growth and support operating margin expansion in fiscal 2028. UBS also highlighted Jabil's shift away from businesses that did not meet its growth, margin and return on investment thresholds and toward faster-growing markets such as robotics and automation.