Zacks.com featured highlights include Jabil, Ciena, Commercial Metals and Plains All American Pipeline

Zacks highlights a relative-price-strength screen into 2026 amid easing inflation, improving growth expectations and heavy AI/data-center investment, recommending Jabil (JBL), Ciena (CIEN), Commercial Metals (CMC) and Plains All American (PAA). Key metrics: Jabil (market cap >$25bn, VGM A) sees fiscal 2026 EPS +18.5% Y/Y with its estimate up 4.5% in 60 days and shares +58% Y/Y; Ciena (VGM B) projects fiscal 2026 EPS +97.7% with 3–5yr EPS growth 41.8%, estimate rising from $4.36 to $5.22 and shares +191.2% Y/Y; Commercial Metals (market cap ~$8bn, VGM A) shows fiscal 2026 EPS +125.2% with estimates +21.3% in 60 days and shares +42.4% Y/Y; Plains (market cap ~$13bn, VGM A) had estimates +6.8% in 60 days, mixed recent beats/misses (two/ four quarters) and units +3.6% Y/Y. The piece is constructive for momentum-focused investors but is primarily a thematic/screen recommendation rather than new company-specific catalysts.

Analysis

Market structure: AI and data‑center capex materially benefit optical networking (CIEN) and contract electronics (JBL) by increasing demand for high‑capacity optics and board/system assembly; Ciena gains pricing power on wavelength and packet optics, JBL on outsourced manufacturing scale, while PAA’s midstream margins depend on crude differentials and are more cyclically exposed. Supply/demand signals point to tight bandwidth equipment lead times (supporting 10–30% FY growth for winners) and mixed metal demand—steel (CMC) tied to construction + scrap tightness supporting margin expansion, while pipeline volumes track oil prices and refinery turnarounds.

Risk assessment: Key tail risks include a sudden Fed tightening that compresses multiples (S&P drawdown 10–20%), a telco capex pause (CIEN revenue slip >15% in 2 quarters), semiconductor shortages hitting JBL gross margins by 200–400bps, or a major pipeline regulatory event rerating PAA by >25%. Immediate (days) moves will be earnings/estimate re‑reads (±10–20%), short term (3–6 months) driven by capex cycles and 60‑day estimate revisions, long term (12–36 months) by structural AI adoption and energy transition.

Trade implications: Implement a tilted long book: establish a 0.8–1.5% portfolio position in CIEN (buy shares or 6‑month 20–30% OTM call spreads) and 1% in JBL (buy shares, hedge with 3‑6 month put protection). Take a 0.75% long in CMC (pairs trade: long CMC, short a steel ETF exposure like SLX at 0.5% to isolate company vs sector) and a cautious 0.5% income position in PAA using covered calls (collect premium; exit if WTI > $90 or price falls >15%). Scale in 25% now, add on 10–15% pullbacks; set stop losses 12–18%.

Contrarian angles: Consensus may overstate CIEN’s sustained 40%+ multi‑year EPS growth if large telco orders compress; the 191% YTD share gain suggests at least 20–35% downside risk on a revenue miss—prefer option spreads to limit asymmetric downside. JBL’s outsized run risks margin swings from component shortages, so avoid full conviction until next two quarters of margin stabilization. CMC is underappreciated cyclically—if U.S. construction starts accelerate by +5% YoY, CMC could outperform by 20–30% in 6–12 months; PAA is the contrarian short if Brent/WTI fall below $65 for 60+ days.

Key Decisions for Investors

• Establish a 1.0% portfolio long position in CIEN now; complement with a 6‑month call spread (buy 30% OTM call, sell 60% OTM call) to express upside while capping premium; reassess after next quarterly print (within 30–45 days), trim if revenue guidance misses by >5%.
• Initiate a 1.0% long position in JBL equity, hedged with 3‑month 10% OTM puts equal to 30% of notional to protect against component‑driven margin shocks; add remaining 75% of target size on a 10–15% pullback.
• Add a 0.75% long position in CMC and pair with a 0.5% short in SLX (steel ETF) to isolate share‑specific upside; target 20–30% upside in 6–12 months or exit if U.S. housing starts decline >5% QoQ.
• Take a conservative 0.5% income position in PAA by buying shares and selling 3‑month covered calls at ~5% OTM; unwind if WTI/Brent rises above $90 or if quarterly DCF coverage falls <1.2x.
• Implement a pair trade: long CIEN (0.8%) / short PAA (0.4%) to express tech capex vs midstream weakness; close if CIEN underperforms its 30‑day relative strength by >15% or if oil differentials stabilize (WTI/Brent spread narrows <$2 for 30 days).