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Celestica
(TSX:CLS)
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Rating:77Outperform
Price Target:
C$462.00
▲(9.07% Upside)
Action:Reiterated
Date:07/29/26
The score is driven primarily by strong financial performance (rapid growth and improved profitability with a healthier leverage profile) and an exceptionally bullish earnings call with raised guidance and strong AI/hyperscaler demand visibility. Offsetting factors are weaker cash conversion (working-capital and reinvestment drag), a high P/E with no dividend support, and only mixed technical positioning versus key moving averages.
Positive Factors
Rapid revenue and earnings growth
Strong top-line expansion and faster earnings growth indicate broad customer adoption and operating leverage. The raised annual outlook supports a durable growth trajectory over the next several quarters, rather than a single-period performance increase.
Negative Factors
Weak cash conversion and working-capital intensity
Cash generation is positive but materially below reported earnings, reflecting working-capital swings and inventory funding. Sustained growth will require significant cash tied up in programs, limiting flexibility and increasing execution sensitivity.
Read all positive and negative factors
Positive Factors
Negative Factors
Rapid revenue and earnings growth
Strong top-line expansion and faster earnings growth indicate broad customer adoption and operating leverage. The raised annual outlook supports a durable growth trajectory over the next several quarters, rather than a single-period performance increase.
Read all positive factors
Celestica (CLS) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$54.54B
Dividend YieldN/A
Average Volume (3M)459.05K
Price to Earnings (P/E)32.1
Beta (1Y)2.35
Revenue Growth45.85%
EPS Growth107.73%
CountryCA
Employees23,803
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)9.63
Shares Outstanding126,111,115
10 Day Avg. Volume366,170
30 Day Avg. Volume459,051
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)15.41
Price to Sales (P/S)2.70
P/FCF Ratio73.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$647.73Price Target Upside52.92% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)15.73
Revenue Forecast (FY)C$28.82B
Celestica Business Overview & Revenue Model
Company Description
Celestica Inc., together with its subsidiaries, provides supply chain solutions in Asia, North America, and internationally. It operates through two segments, Advanced Technology Solutions, and Connectivity and Cloud Solutions. The company offers ...
How the Company Makes Money
Celestica primarily makes money by selling manufacturing and related services to original equipment manufacturers (OEMs) and other technology/industrial customers under contract-based engagements. Its core revenue stream is product and service rev...
Celestica Earnings Call Summary
Earnings Call Date:Jul 27, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 26, 2026
Earnings Call Sentiment Positive
The call conveyed very strong operational and financial momentum: materially higher revenue, record operating margin, significant segment-level growth (especially CCS/HPS and AI compute ramps), raised full-year outlooks, and confident guidance for Q3 and 2027 acceleration. Key risks were acknowledged—inventory build to support ramps, ongoing materials and long lead-time constraints, slight gross margin mix pressure, and customer concentration—but these were described as managed and reflective of robust multiyear demand visibility. Overall, the positive growth, margin expansion, improved leverage metrics and strengthened outlook materially outweigh the operational and supply-chain headwinds noted.Positive Updates
Record Revenue and EPS
Q2 revenue of $4.70 billion, up 62% year-over-year; adjusted EPS of $2.54, up 83% year-over-year and above the high end of guidance.
Negative Updates
Inventory Build and Working Capital
Inventory at quarter end $3.4 billion, up ~$0.7 billion sequentially and ~ $1.5 billion year-over-year to support program ramps, increasing working capital intensity.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and EPS
Q2 revenue of $4.70 billion, up 62% year-over-year; adjusted EPS of $2.54, up 83% year-over-year and above the high end of guidance.
Read all positive updates
Company Guidance
Celestica guided third-quarter revenue of $5.25–$5.55 billion (≈69% growth at the midpoint) and adjusted EPS of $2.88–$3.08 (≈89% growth at the midpoint), implying an adjusted operating margin of about 8.4% and an adjusted effective tax rate of ~20%; it raised full‑year 2026 revenue to $20.5 billion (from $19B) — ~65% growth — and adjusted EPS to $11.30 (from $10.15, ≈87% growth), with full‑year adjusted operating margin now 8.4% (vs. prior 8.1%), free cash flow raised to $600M (from $500M) and planned CapEx of ~ $1.0B; segment outlooks included Q3 communications up ~60% and enterprise up ~190% (CCS full‑year ~+85%), ATS up mid‑teens in Q3 and ~+10% for FY26, and management expects 2027 revenue growth to accelerate beyond the 65% 2026 pace with EPS growth outpacing revenue.Celestica Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
82
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.49B | 12.61B | 9.65B | 7.96B | 7.25B | 5.63B |
| Gross Profit | 1.83B | 1.47B | 1.03B | 778.50M | 636.30M | 487.00M |
| EBITDA | 1.63B | 1.23B | 736.20M | 545.30M | 408.10M | 294.00M |
| Net Income | 1.11B | 847.07M | 428.00M | 244.60M | 145.50M | 103.90M |
Balance Sheet | ||||||
| Total Assets | 9.77B | 7.20B | 5.99B | 5.89B | 5.63B | 4.67B |
| Cash, Cash Equivalents and Short-Term Investments | 534.83M | 594.52M | 423.30M | 372.60M | 374.50M | 394.00M |
| Total Debt | 979.60M | 914.03M | 796.70M | 782.80M | 786.10M | 794.40M |
| Total Liabilities | 7.30B | 4.99B | 4.09B | 4.12B | 3.95B | 3.20B |
| Stockholders Equity | 2.48B | 2.21B | 1.90B | 1.77B | 1.68B | 1.46B |
Cash Flow | ||||||
| Free Cash Flow | 516.03M | 466.32M | 303.00M | 304.60M | 188.90M | 174.60M |
| Operating Cash Flow | 1.14B | 671.04M | 473.90M | 429.70M | 297.90M | 226.80M |
| Investing Cash Flow | -610.76M | -207.27M | -212.50M | -122.40M | -108.90M | -364.30M |
| Financing Cash Flow | -302.65M | -288.46M | -208.50M | -311.40M | -208.50M | 67.70M |
Celestica Technical Analysis
Neutral
423.57
Price Trends
458.89
Negative
496.62
Negative
454.93
Negative
Market Momentum
-13.96
Negative
48.90
Neutral
48.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CLS, the sentiment is Neutral. The current price of 423.57 is below the 20-day moving average (MA) of 430.96, below the 50-day MA of 458.89, and below the 200-day MA of 454.93, indicating a neutral trend. The MACD of -13.96 indicates Negative momentum. The RSI at 48.90 is Neutral, neither overbought nor oversold. The STOCH value of 48.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:CLS.
Celestica Risk Analysis
Celestica disclosed 64 risk factors in its most recent earnings report. Celestica reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Celestica Peers Comparison
UnderperformOutperform
Sector (61)
TSE:CLS
Celestica
432.45
95.26
28.25%
TSE:PNG
Kraken Robotics Systems Inc
5.13
1.66
47.84%
TSE:ZTE
ZTEST Electronics
0.43
0.19
75.51%
Celestica Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Celestica Prices $3 Billion Equity Offering to Fund Growth in AI and Cloud Infrastructure
Positive
Aug 6, 2026
Celestica Inc. has priced a public equity offering of 9,677,419 common shares at $310 per share, targeting gross proceeds of $3 billion before fees. The company has also granted underwriters a 30-day option to purchase up to an additional 1,451,61...
Business Operations and StrategyPrivate Placements and Financing
Celestica Launches $3 Billion Equity Offering to Ride AI Infrastructure Boom
Positive
Aug 5, 2026
Celestica is tapping capital markets with a $3 billion treasury offering of common shares to fund expansion across high-performance AI compute and data center Ethernet networking. The equity raise, led by BofA Securities, Citigroup and TD Securiti...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.