Circuit board maker Jabil Inc. ( JBL ) will report its fiscal second-quarter numbers after the market close March 15. The consensus calls for earnings of $0.55 per share, up from $0.48 during the same period last year. JBL shares are up 5.8% on the year.
JBL was recently trading at $28.24, down $3.46 from its 12-month high and $4.54 above its 12-month low. Overall technical indicators for JBL are bullish with a weak upward trend. The stock has recent support above $26.00, and recent resistance below $28.50. Of the seven analysts who cover the stock, two rate it a "strong buy", one rates it a "buy", and four rate it a "hold". JBL gets a score of 66 from InvestorsObserver's Stock Score Report.
After a tough final quarter in 2017, and a rough start to 2018, JBL shares have finally hit bottom and are once again moving higher. The stock is up nicely from its 52-week low set in early February and has managed to move into positive territory for the year. However, its valuation is bit pricey, with a trailing P/E of 50. It is clear that the stock is priced for perfection, but with earnings forecast to rise by 21.8% for the current year, and by 12.0% per annum over the next five years, there is some upside, but the company cannot afford any bad news or investors will focus on the valuation and push the stock lower. The company has posted better than expected earnings and sales for seven straight quarters, and if it can extend that streak for another quarter, shares will likely continue to build on their recent momentum and continue adding to its gains for the year.
Stock Only Trade
If you want a bullish hedged trade on the stock, consider an April 21/26 bull-put credit spread for a 40-cent credit. That's a potential 8.7% return (75.6% annualized*) and the stock would have to fall 6.5% to cause a problem.
If you want to take a bearish stance on the stock at this time, consider an April 31/34 bear-call credit spread for a $0.25 credit. That's a potential 9.1% return (79.0% annualized*) and the stock would have to rise 10.7% to cause a problem.
Covered Call Trade
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Originally published on InvestorsObserver.com