Investors looking to profit from the growing electric vehicle market should consider buying shares of this electronics manufacturing service company, Goldman Sachs said. Jabil counts Tesla and Rivian among its customers and its electric vehicle segment is growing, Goldman highlighted. "Fast growing end markets, including EVs and cloud, are becoming an increasingly large percent of the company's total portfolio, which we expect to allow Jabil to sustain solid top-line growth," Goldman's Mark Delaney said in a note Thursday. Goldman upgraded Jabil to buy from neutral and raised its 12-month price target on the stock to $75. The new estimate implies 21.5% upside from Jabil's closing price Thursday. Jabil projects revenue from its auto, cloud and medical segments is expected to rise to 44% in fiscal year 2022, up from 42% in 2020. The company estimates its auto end market will grow about 40% year over year in fiscal year 2022. "With such a high percent of its auto business tied to EVs, it implies that roughly a mid-single-digit percent of total Jabil revenue this year could come from EVs, making it one of the companies in the supply chain most exposed to EVs. We continue to expect EVs to experience rapid growth," Delaney said. Plus, Goldman said Jabil's valuation is currently reasonable. The stock is trading at lower multiples than peers, according to Goldman's analysis. Jabil shares have outperformed the market this year, up 45% versus the S & P 500's 24% gain in 2021. —CNBC's Michael Bloom contributed reporting.
An employee works on a circuit board at Jabil Circuit's facility in St. Petersburg, Florida.
Jim Stem | Bloomberg | Getty Images
Investors looking to profit from the growing electric vehicle market should consider buying shares of this electronics manufacturing service company, Goldman Sachs said.