RBC cuts price target on Celestica

Good company, bad environment.

That’s the takeaway from RBC Dominion Securities analyst Paul Treiber’s latest report on Celestica (Celestica Stock Quote, Chart, News, Analysts, Financials NYSE:CLS).

As reported by the Globe and Mail, Treiber April 22 maintained his “Outperform” rating on CLS while chopping his price target on the stock from (US) $160.00 to $120.00. Treiber says the macro environment is simply too much right now.

“We expect Celestica to report solid Q1 results, possibly above our estimates and consensus, given continued hyperscaler build-outs of data centers,” he wrote. “While Celestica has a track record of raising guidance (3 times in both FY23 and FY24), we believe macro/tariff uncertainty is likely to result in the company leaving FY25 guidance unchanged. Tariffs are a potential headwind to growth, though Celestica’s hyperscaler customers are likely less price sensitive while Celestica’s global footprint positions the company well to manage supply chain disruptions.”

Celestica will report its Q1, 2025 results after market on April 25th.

On January 29, the company reported its Q4, 2024 results. CLS posted non-GAAP Adjusted EPS of $1.11 on revenue of $2.55-billion, a topline that was up 19%, year-over-year.

“We are pleased with the company’s strong performance in the fourth quarter and solid finish to 2024,” CEO Rob Mionis said. “Fourth quarter revenue of $2.55 billion was up 19% year-over-year, while non-GAAP adjusted EPS* of $1.11 was our highest quarterly EPS ever. For the full year 2024, Celestica achieved 21% revenue growth, while our non-GAAP adjusted EPS* grew 58% year-over-year. Looking towards 2025, we are pleased to raise our full-year outlook, reflecting strengthening demand in our CCS segment. We now anticipate revenue of $10.7 billion, an increase from our previous outlook of $10.4 billion, and non-GAAP adjusted EPS* of $4.75, up from our previous outlook of $4.42. Overall, the current demand environment for data center hardware is robust, as evidenced by recent customer forecasts as well as new AI program awards over the last 90 days, including our second and third 1.6T program wins. As such, we believe the positive momentum we are experiencing will continue beyond this year, and into 2026.”