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Celestica wins price target raise at RBC

CLS stock

Ahead of the company’s first quarter results, RBC analyst Paul Treiber has raised his price target on Celestica (Celestica Stock Quote, Chart, News, Analysts, Financials NYSE:CLS).

As reported in the Globe and Mail, The analyst April 22 maintained his “Outperform” rating on CLS, but raised his price target on the stock from (U.S.) $38.00 to $47.00.

Treiber says the upcoming quarter could deliver some upside surprises.

“Celestica may deliver another beat and raise on hyperscaler data centre build out,” he argued. “We believe Celestica is likely to report solid Q1 results, as hyperscalers continue to rapidly build out data centers to address strong AI demand. Since hyperscalers account for 35 per cent of Celestica’s revenue, hyperscaler strength, in our view, is likely to offset the slowdown in electrical vehicles (EVs), which represents less than 10 per cent of Celestica’s revenue. Similar to last year, we believe that Celestica is likely to raise FY24 guidance.”

On January 29, CLS reported its Q4, 2023 results. The company posted Net Earnings of $42.2-million on revenue of $2.04-billion.

“We are pleased with our solid fourth quarter results, delivering non-[international financial reporting standard] operating margin of 6.0 per cent and non-IFRS adjusted [earnings per share] of 76 cents. We had a strong finish to 2023 and achieved 10-per-cent revenue growth for the full year compared to 2022 while our non-IFRS adjusted EPS of $2.43 and non-IFRS operating margin of 5.6 per cent were each the highest in our company’s history,” said CEO Rob Mionis. “The strong momentum we had in 2023 is continuing into 2024, and we remain confident in our long-term strategy.”

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