Why has JBL outperformed EPS forecasts since 2024?

Jabil's outperformance in EPS forecasts since 2024 can be attributed to several key factors:

1. Strong Financial Performance: Jabil has demonstrated resilience in its financial performance, despite revenue decline. The company reported better-than-expected results for the third quarter of fiscal year 2024, with a EPS of $1.89, surpassing estimates of $1.85. This indicates a strong operational execution and market position.
2. Market Position and Strategy: Jabil's strategic product launches and market positioning in AI and datacenter markets have been successful. The company's recent launch of 1.6T pluggable transceivers addresses the growing demand for photonics products, particularly in AI-driven workloads. This strategic move aligns with the increasing investment in AI infrastructure, benefiting Jabil's revenue growth.
3. Divestiture and Focus on Core Business: Jabil's decision to divest its Mobility business and a strategic move away from less profitable legacy programs have positioned the company better for long-term growth. This focus on core competencies likely led to improved profitability and better alignment with market demands.
4. Share Buybacks and Confidence from Management: Management's aggressive share buybacks demonstrate confidence in the company's future prospects. This can positively influence investor sentiment and potentially enhance the stock's valuation.
5. Industry Trends and Growth Sectors: Jabil is well-positioned to capitalize on emerging trends such as electric vehicles, energy storage, cloud services, and digital health. These sectors are expected to experience growth, which could lead to increased demand for Jabil's services and products.

In conclusion, Jabil's outperformance in EPS forecasts can be attributed to its strong financial performance, strategic market positioning, effective business decisions, management's confidence, and alignment with industry trends and growth sectors.