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On Thursday, BMO Capital Markets adjusted their outlook on Celestica (NYSE:CLS) shares, increasing the price target from $118.00 to $130.00 while maintaining an Outperform rating on the stock. The adjustment follows recent investor meetings with the company’s management. According to InvestingPro data, the stock has delivered an impressive 111.64% return over the past year, with 10 analysts recently revising their earnings estimates upward for the upcoming period.
Analyst Thanos Moschopoulos from BMO Capital expressed confidence in Celestica’s ongoing performance, citing a robust demand environment that is not affected by tariffs or broader macroeconomic concerns. The firm’s perspective is that Celestica’s strong competitive position is evidenced by significant contract wins, including a 1.6T deal and agreements with large "digital native" companies. The company’s financial health supports this outlook, with InvestingPro assigning an overall "GREAT" financial health score and noting strong revenue growth of 21.05% in the last twelve months.
Moschopoulos highlighted Celestica’s ability to sustain and potentially increase its market share. The analyst’s optimism is also based on the company’s valuation through the calendar year 2026 (CY2026), suggesting there may be additional upside to the current estimates. Looking ahead, BMO Capital anticipates that calendar year 2027 (CY2027) will be a particularly strong year for growth for Celestica, driven by the full-scale implementation of contracts with major digital native clients. The company’s current PEG ratio of 0.83 suggests attractive valuation relative to its growth prospects, though InvestingPro’s Fair Value analysis indicates the stock may be trading above its intrinsic value.
The raised price target reflects BMO Capital’s view of Celestica’s potential for continued success in the technology solutions sector. The firm’s recent achievements in securing significant contracts are seen as a testament to its competitive edge and ability to navigate the current economic landscape effectively.
Celestica’s stock price movement will be closely watched by investors as the company continues to execute its growth strategy in the face of ongoing global economic challenges. The company’s performance and BMO Capital’s updated price target suggest a positive outlook for Celestica’s financial future.
In other recent news, Celestica reported first-quarter earnings and revenue that surpassed analyst expectations, with adjusted earnings per share reaching $1.20, above the estimated $1.12, and revenue hitting $2.65 billion, a 20% year-over-year increase. The company also raised its full-year 2025 revenue outlook to $10.85 billion and adjusted EPS guidance to $5.00. Despite these strong results, shares declined slightly, possibly due to Q2 guidance that was only modestly above consensus. Celestica’s Connectivity & Cloud Solutions segment experienced a 28% increase in revenue, while the Advanced Technology Solutions segment grew by 5%.
Stifel analysts maintained a Buy rating on Celestica with a $150 price target, highlighting the company’s robust financial performance and strategic wins, such as securing a contract to produce 1.6T switches for a major OEM. BMO Capital Markets also maintained an Outperform rating, though they adjusted their price target to $118 from $140 due to industry-wide multiple compression. Analyst Thanos Moschopoulos noted Celestica’s strong competitive position and the positive impact of temporarily waived tariffs for data center infrastructure.
Celestica’s management emphasized ongoing demand in the CCS segment and growth in the industrial business, further supported by the company’s expansion into the pluggable optical transceiver market. The company repurchased 0.6 million common shares for $75 million during the quarter, indicating confidence in its financial health. These developments underscore Celestica’s solid market position and potential for continued growth.
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