Jabil's (JBL) initial fiscal 2027 outlook looks cautious given management's history of guiding low and then beating, so the market is likely to underwrite higher estimates, UBS Securities said.

The brokerage said in a note Wednesday that the company started fiscal 2025 and 2026 roughly 10% and 15% above its initial revenue guides, respectively, and expects investors to assume at least 10% upside to the $44.5 billion fiscal 2027 revenue guide, or about $49 billion.

Stronger volume should also leave room for operating margin to expand 10 to 20 basis points beyond the initial 6.1% guide, UBS said. It expects the market to underwrite EPS of at least $20, versus the $17.55 guide.

The investment firm raised its fiscal 2027 earnings per share estimate to $17.57 from $16.78 and its fiscal 2028 estimate to $22.63 from $20.24. It cited stronger AI-related demand. Jabil also raised its fiscal 2027 AI-related revenue growth outlook to 54% from about 50%.

UBS kept its buy rating and $430 price target.

Shares of Jabil were up 3.4% in Thursday afternoon trading.

Price: 296.46, Change: +9.60, Percent Change: +3.35