Bank of America Securities (BofA) analyst Ruplu Bhattacharya maintained Jabil (NYSE:JBL) with a Buy and raised the price forecast from $225 to $245 on Friday.

Bhattacharya noted that Jabil reported a strong fiscal third quarter of 2025, and the stock gained 42% year-to-date, prompting queries regarding further upside.

According to the analyst, Jabil’s fiscal 2026 and 2027 revenue estimates could prove conservative, driven by the company’s strong AI revenues and a recovery in other markets.

Also Read: Jabil Raises Sales And Profit Outlook, Announces $500 Million Investment To Expand Footprint

The analyst has been conservative in his forward estimates. He modeled Jabil’s AI revenues growing to $10.6 billion and $13.3 billion in fiscal years 2026 and 2027, from $8.5 billion in fiscal year 2025.

Bhattacharya’s projections assumed 25% year-over-year (Y/Y) growth for these two years, which is meaningfully lower than the 50+ Y/Y growth in fiscal 2025.

While the analyst modeled AI revenues growing by $2.1 billion and $2.7 billion in fiscal 2026 and 2027, he modeled total Jabil revenue increasing by $1.7 billion and $2.8 billion.

For fiscal 2026, he assumed the remaining businesses’ net decline Y/Y, and for fiscal 2027, he assumed the remaining businesses’ remain flat Y/Y, which could prove conservative. His estimates for fiscal years 2026 and 2027 revenue and EPS are higher versus the Street.

Revenue from Amazon.Com Inc (NASDAQ:AMZN) remains strong, and there is a significant opportunity for optical transceivers and AI-related switching, as per Bhattacharya, which is driving potential upside for Jabil.

According to the analyst, Jabil manufactures for more than a dozen end markets and can benefit from new program ramps in healthcare (pharma and med devices) and continued strong revenues in Digital Commerce.

Bhattacharya said that every $1 billion in higher revenue annually, at a mid-single-digit operating margin, can drive $0.40 higher EPS. The analyst noted that the Street has been conservative in modeling earnings.

Fiscal 2025 consensus EPS has increased about $1.00 since the fiscal fourth-quarter 2024 earnings call.

Jabil trades at 18 times Bhattacharya’s calendar 2026E EPS, a discount to peer Celestica, which trades at 22 times calendar 2026 Street EPS, even though both companies can have similar EPS growth in fiscal 2026. The analyst justified the valuation by citing Jabil’s lower operating margin compared to Celestica, Inc. (NYSE:CLS).

Price Action: JBL shares are trading higher by 0.78% to $206.26 at last check Friday.

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