DCF Studio

    JBL · NYQ · Technology

    Jabil Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 79.54

    Market price

    USD 299.57

    Implied upside

    -73.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 79.54-73.4%
    Exit multiple
    USD 177.24-40.8%
    Market price
    USD 299.57

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 28.7bnUSD 27.6bnUSD 26.5bnUSD 25.5bnUSD 24.6bn-3.8%
    EBITUSD 1.3bnUSD 1.3bnUSD 1.2bnUSD 1.2bnUSD 1.1bn-3.8%
    NOPATUSD 1.1bnUSD 1.0bnUSD 974.7mUSD 937.6mUSD 901.9m-3.8%
    Add depreciation & amortisationUSD 723.7mUSD 696.1mUSD 669.7mUSD 644.2mUSD 619.7m-3.8%
    Less capital expenditureUSD -816.3mUSD -785.3mUSD -755.4mUSD -726.7mUSD -699.1m-3.8%
    Less increase in working capitalUSD 91.9mUSD 88.4mUSD 85.1mUSD 81.8mUSD 78.7m+3.8%
    Free cashflow to firmUSD 1.1bnUSD 1.0bnUSD 974.0mUSD 936.9mUSD 901.3m-3.8%
    Discount factor0.94990.85700.77320.69760.6294-
    Present valueUSD 999.7mUSD 867.7mUSD 753.1mUSD 653.6mUSD 567.3m-13.2%
    Present Value Of The ForecastUSD 3.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.196Reported 1.292, pulled toward 1.0 (Blume)
    Cost of equity11.57%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 31.4bn90.3% of capital
    Total debtUSD 3.4bn9.7% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC10.84%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 79.54

    63% of EV

    Forecast FCFF, final year
    USD 901.3m
    Capex at depreciation, working capital in reinvestment
    USD 928.3m
    Less reinvestment at g/ROIC (10.7% of NOPAT)
    USD -99.8m
    Capitalised
    USD 828.5m
    ROIC (reported)
    23.3%
    Terminal value, undiscounted
    USD 10.2bn
    Terminal value, discounted
    USD 6.4bn
    Enterprise value
    USD 10.3bn
    Less net debt
    USD 1.4bn
    Equity value
    USD 8.8bn

    Exit at 15.6x EBITDA

    Value per shareUSD 177.24

    82% of EV

    Terminal value, undiscounted
    USD 27.4bn
    Terminal value, discounted
    USD 17.2bn
    Enterprise value
    USD 21.1bn
    Less net debt
    USD 1.4bn
    Equity value
    USD 19.7bn

    Spread between methods: 76%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.84%97.18101.15105.73111.07117.40
    9.84%84.9487.7290.8794.4598.59
    10.84%75.3177.3179.5482.0484.87
    11.84%67.5269.0070.6272.4174.41
    12.84%61.1062.2163.4164.7266.17

    Outlined: this model. Green text: above today's price of 299.57. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year-3.8%31.7%+35.5pp
    EBIT margin4.7%15.9%+11.3pp
    Discount rate10.8%4.8%-6.1pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.