Jabil Inc.

Overview Key strengths Key risks Leading global outsourced manufacturer with significant manufacturing scale and diverse end-market exposure, indicated by expected revenue of more than $30 billion in fiscal 2023. Meaningful customer concentration risk, with the top five representing 43% of total revenues and one exposed to weak consumer demand that represents 19% (Apple); this has improved in recent years through revenue diversification. Focus on higher-margin, faster-expanding end markets such as health care, packaging, 5G, cloud, electric transportation, warehouse automation, and renewable energy generation and storage. Highly competitive industry dynamics with large global peers and low customer-switching costs in certain product categories. Lower adjusted leverage than similarly rated peers of about 1.4x expected in fiscal 2023 and 2024 and a strong

...We expect Jabil Inc.'s revenues will continue to expand despite a weakening macroeconomic environment and rising risk of slower than expected recovery in key end markets. The company has demonstrated good growth in recent years, but amid weakness in consumer, communications, and semiconductor end markets and lingering supply chain challenges, year- over-year revenue growth decelerated through the first nine months (to 1.8% in the third quarter of 2023 from 12.5% in the first quarter). We expect revenue will decline about 6.5% in the fourth quarter, leading to 3.4% revenue growth in fiscal 2023. We expect the prevailing macroeconomic environment and weak demand in key end markets will remain headwinds, especially its consumer-focused segments due to falling demand for discretionary products (PCs and smartphones) over the next few quarters. Additionally, Jabil's move toward a consignment model from purchase and resale in its cloud business adds a modest revenue headwind. However, its diversified...

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