Should you sell your Celestica stock?

TD Cowen analyst John Shao expects Celestica (Celestica Stock Quote, Chart, News, Analysts, Financials NYSE:CLS) to deliver better-than-expected fourth-quarter 2025 results when the company reports on Jan. 28, citing consistent execution and limited downside risk into the print. He maintained a “Hold” rating and reaffirmed a US$305 target price. Street consensus stands at about US$370.75.

Celestica is a Toronto-based global technology company providing design, manufacturing, and supply-chain solutions for complex electronics.

Shao said the stock’s near-term performance remains closely tied to volatility in the broader AI trade. While he sees Celestica as a key beneficiary of accelerated AI infrastructure build-outs by hyperscale customers, he believes valuation now exceeds that of industry leaders, limiting near-term upside…

In a client note, Shao said he forecasts Q4/25 revenue of US$3.6-billion, up 42% year over year, driven primarily by Communications programs tied to AI and networking demand. He estimates Advanced Technology Solutions revenue of US$798-million, down 1% year over year,

Communications revenue of US$2.1-billion, up 78%, and Enterprise revenue of US$717-million, up 28%. He expects EBIAT of US$280-million, implying a 7.7% margin, up 90 basis points year over year, and EPS of US$1.85.

As reported by the Globe and Mail, Shao said upward revisions to guidance should continue, noting that January marked the first time initial guidance set in October was revised higher, with EPS raised by an average of 6%. For fiscal 2026, he forecasts revenue of US$17.1-billion and EPS of US$9.27, above consensus of US$8.42, reflecting what he views as a larger networking opportunity next year.

He said Celestica has “earned its premium valuation” through consistent execution, strong customer relationships, supply-chain expertise, and favourable end-market tailwinds, supported by a strong management team. He added that these attributes should persist through 2026.

However, Shao said the stock’s near-term performance remains closely tied to volatility in the broader AI trade. While he sees Celestica as a key beneficiary of accelerated AI infrastructure build-outs by hyperscale customers, he believes valuation now exceeds that of industry leaders, limiting near-term upside.

As a result, he kept a “Hold” rating, saying he would revisit his view if there is greater clarity around a key digital-native customer’s ASIC program, improvements in customer concentration, or more attractive entry points following potential volatility.

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