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Jabil Shares Fall After Guidance Cut

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Key Takeaways

  • The S&P 500 lost 0.7% on Friday, March 15, 2024, after a report showed consumer expectations for inflation inched higher in February.
  • Shares of Jabil plunged as the electronics manufacturer issued lower-than-expected guidance, noting it faces a transitional year after divesting its mobility business.
  • Real estate information firm CoStar Group reported an increase in visitors to its Homes.com platform, and its shares moved higher.

Major U.S. equities indexes fell on the final day of the trading week as a monthly survey by the University of Michigan showed consumer expectations for inflation edged higher in February.

The uptick in predicted price increases came at the end of a week that saw hotter-than-expected consumer and wholesale inflation prints, raising doubts about the timing of potential interest rate cuts by the Federal Reserve.

The S&P 500 slid 0.7% on Friday. The Nasdaq dropped 1.0%, while the Dow closed the day 0.5% lower.

Shares of Jabil (JBL) posted the steepest losses on the S&P 500, plunging 16.5% as the contract electronics manufacturer lowered its full-year forecasts after missing quarterly profit and sales estimates. The company recently wrapped up the divestment of its mobility business and said it faces a transitional year as it works to improve its footprint and cost structure.

Although software giant Adobe (ADBE) reported higher-than-expected revenue and earnings per share (EPS) for its fiscal first quarter, its sales guidance for the current quarter fell short of estimates, and its shares plummeted 13.7%. The reduced outlook raised concerns about Adobe’s capacity to capitalize on artificial intelligence (AI) opportunities.

Underwhelming guidance also pressured shares of cosmetics retailer Ulta Beauty (ULTA), which slipped 5.2%. The company topped quarterly earnings estimates and said it would expand internationally via a joint venture in Mexico. However, the company forecast a declining profit margin in 2024 as it navigates elevated costs and increased promotions.

Real estate information and analytics firm CoStar Group (CSGP) was the top performer in the S&P 500 Friday. Shares jumped 8.3% after the company announced a sharp year-over-year increase in unique visitors to its Homes.com platform.

Shares of Steel Dynamics (STLD) gained 4.3% after the steel producer issued stronger-than-expected guidance, highlighting solid demand across its automotive, non-residential construction, energy, and industrial sectors. The company expects its flat-rolled steel business to drive growth and anticipates an uptick in earnings from its metals recycling segment.

Cummins (CMI) shares also added 4.3% after UBS upgraded the stock to Buy and lifted its price target to $321. Analysts expect the engine manufacturer to see a peak in demand in 2026, driven by momentum in the truck manufacturing cycle.

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