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Celestica
(TSX:CLS)
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Rating:72Outperform
Price Target:
C$467.00
▲(10.25% Upside)
Action:Reiterated
Date:10/29/26
The score is driven primarily by strong financial performance (rapid revenue scale-up, meaningfully improved margins, and a de-risking balance sheet) and a very upbeat earnings call with raised guidance and strong multi-year growth visibility. Offsetting these positives are weak technicals (price below key moving averages with negative MACD) and cash-flow intensity (lower free-cash-flow conversion and expected elevated investment/working capital), while valuation (P/E ~28) remains demanding.
Positive Factors
Revenue and Margin Expansion
Celestica has combined substantial revenue growth with meaningful operating leverage, as profitability improved alongside expansion from 2021 through the latest period. This supports stronger internal funding capacity, reinforces customer confidence, and suggests earnings power can remain durable if current program growth continues.
Negative Factors
Lower Cash Conversion
Lower free-cash-flow guidance shows that rapid growth is requiring meaningful working-capital funding, reducing cash conversion even as reported earnings expand. If this pattern persists, more operating cash may remain tied up in customer programs, limiting near-term flexibility for debt reduction or shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and Margin Expansion
Celestica has combined substantial revenue growth with meaningful operating leverage, as profitability improved alongside expansion from 2021 through the latest period. This supports stronger internal funding capacity, reinforces customer confidence, and suggests earnings power can remain durable if current program growth continues.
Read all positive factors
Celestica (CLS) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$53.04B
Dividend YieldN/A
Average Volume (3M)452.45K
Price to Earnings (P/E)28.0
Beta (1Y)2.11
Revenue Growth60.56%
EPS Growth71.73%
CountryCA
Employees23,803
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)10.72
Shares Outstanding126,111,810
10 Day Avg. Volume602,480
30 Day Avg. Volume452,447
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)15.41
Price to Sales (P/S)2.75
P/FCF Ratio74.38
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$646.61Price Target Upside52.66% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
EPS Forecast (FY)16.09
Revenue Forecast (FY)C$29.37B
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:Oct 26, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jan 27, 2027
Earnings Call Sentiment Positive
The call was strongly positive, supported by record third-quarter revenue, operating margin, EPS, exceptional CCS and AI infrastructure growth, raised 2026 guidance, and a $40 billion 2027 revenue outlook. Management also described strong multi-year demand visibility, expanding customer programs, and a solid balance sheet. The principal negatives were lower adjusted gross margin, reduced 2026 free cash flow guidance, expected net cash use in 2027, elevated inventory and investment requirements, supply and infrastructure constraints, customer concentration, and increasing competition. Overall, the highlights significantly outweighed the lowlights.Positive Updates
Record Third-Quarter Revenue and Profitability
Third-quarter revenue was $5.83 billion, up 83% and above the high end of guidance. Non-GAAP operating margin was 8.5%, up 90 basis points and the highest quarterly level in company history. Adjusted EPS was $3.30, up $1.72 or 109%, and above the high end of guidance.
Negative Updates
Adjusted Gross Margin Declined in the Third Quarter
Adjusted gross margin was 11.2%, down 50 basis points, largely due to mix in the CCS segment.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Third-Quarter Revenue and Profitability
Third-quarter revenue was $5.83 billion, up 83% and above the high end of guidance. Non-GAAP operating margin was 8.5%, up 90 basis points and the highest quarterly level in company history. Adjusted EPS was $3.30, up $1.72 or 109%, and above the high end of guidance.
Read all positive updates
Company Guidance
For the fourth quarter, revenue is projected to be between $6.275 billion and $6.575 billion, representing growth of 76% at the midpoint, adjusted earnings per share is anticipated to be between $3.37 and $3.57, representing an increase of $1.58 at the midpoint or 84% growth, adjusted operating margin is expected to be 8.7% assuming the midpoint, and adjusted effective tax rate is expected to be approximately 20%; networking revenue is expected to grow approximately 65%, compute and storage approximately 160%, and ATS revenue is anticipated to be up in the low 20s percentage range. For 2026, revenue outlook increases from $20.5 billion to $21 billion, representing growth of 69%, adjusted EPS outlook is $11.55, representing growth of 91%, adjusted operating margin is 8.4%, free cash flow outlook is $460 million, CCS revenue is expected to reach $17.4 billion, networking revenue $11.8 billion, up 66%, compute and storage revenue $5.6 billion, up 170%, and ATS revenue $3.6 billion, up 13%, with segment margins of 6.4%. For 2027, revenue is anticipated to be $40 billion, representing a 90% increase compared to our 2026 outlook, non-GAAP operating margin is expected to be 9%, adjusted EPS $21.50, up 86%, CCS revenue is expected to grow approximately 110%, ATS approximately 10%, capital expenditures are expected to be in the range of $1.5 billion-$2 billion, and adjusted effective tax rate is approximately 21%; gross margins are expected to continue in 2027 in the low 11s, and the company is confident it will be able to target to return to positive cash flow in 2028.Celestica Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
84
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.23B | 12.39B | 9.65B | 7.96B | 7.25B | 5.63B |
| Gross Profit | 2.09B | 1.49B | 1.03B | 754.10M | 649.70M | 487.00M |
| EBITDA | 1.71B | 1.21B | 736.20M | 515.70M | 406.70M | 293.72M |
| Net Income | 1.25B | 832.50M | 428.00M | 244.40M | 180.10M | 103.90M |
Balance Sheet | ||||||
| Total Assets | 15.14B | 7.20B | 5.99B | 5.89B | 5.63B | 4.67B |
| Cash, Cash Equivalents and Short-Term Investments | 3.96B | 594.52M | 423.30M | 370.40M | 374.50M | 394.00M |
| Total Debt | 818.80M | 914.03M | 796.70M | 783.80M | 786.10M | 801.80M |
| Total Liabilities | 8.92B | 4.99B | 4.09B | 4.12B | 3.95B | 3.20B |
| Stockholders Equity | 6.21B | 2.21B | 1.90B | 1.77B | 1.68B | 1.46B |
Cash Flow | ||||||
| Free Cash Flow | 545.40M | 458.30M | 303.00M | 201.10M | 102.10M | 174.60M |
| Operating Cash Flow | 1.41B | 659.50M | 473.90M | 326.20M | 211.10M | 226.80M |
| Investing Cash Flow | -841.55M | -203.70M | -212.50M | -122.40M | -108.90M | -364.30M |
| Financing Cash Flow | 3.09B | -283.50M | -208.50M | -207.90M | -121.70M | 67.70M |
Celestica Technical Analysis
Negative
423.57
Price Trends
455.76
Negative
472.85
Negative
462.16
Negative
Market Momentum
-27.19
Positive
44.83
Neutral
39.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CLS, the sentiment is Negative. The current price of 423.57 is below the 20-day moving average (MA) of 463.27, below the 50-day MA of 455.76, and below the 200-day MA of 462.16, indicating a bearish trend. The MACD of -27.19 indicates Positive momentum. The RSI at 44.83 is Neutral, neither overbought nor oversold. The STOCH value of 39.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
396.12
-79.75
-16.76%
TSE:PNG
Kraken Robotics Systems Inc
3.86
-2.58
-40.06%
TSE:ZTE
ZTEST Electronics
0.43
0.15
50.88%
Celestica Corporate Events
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Celestica Lifts Outlook as AI Infrastructure Boom Drives Surging Revenue
Positive
Oct 26, 2026
Celestica reported a sharp expansion in third-quarter 2026 results, with revenue jumping 83% year-on-year to $5.83 billion and adjusted earnings per share more than doubling to $3.30, both above the high end of guidance. Adjusted operating margin ...
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.