Celestica stock price target cut to $118 at BMO Capital

On Monday, BMO Capital Markets adjusted its outlook on Celestica (NYSE:CLS) shares, lowering the price target to $118 from the previous $140 while maintaining an Outperform rating. The revision follows Celestica’s first-quarter results for 2025, which exceeded market expectations, leading the company’s management to raise its full-year 2026 guidance. According to InvestingPro data, seven analysts have recently revised their earnings estimates upward, with price targets ranging from $95 to $150.

Thanos Moschopoulos, an analyst at BMO Capital, cited the rationale behind the price target adjustment, attributing it to a broader trend of multiple compression within the industry. Despite the reduction, the analyst’s stance on Celestica remains positive, bolstered by the company’s performance and future prospects. The company’s strong positioning is reflected in its impressive financial metrics, with InvestingPro data showing a remarkable 104.9% return over the past year and an overall Financial Health score of "GREAT."

The quarterly report provided reassurance regarding the ongoing capital expenditure by hyperscale companies and Celestica’s ability to maintain a strong competitive position. This confidence is supported by the acquisition of several new contracts, referred to as 1.6T wins, which highlight the company’s market strength.

Moschopoulos pointed out that current tariffs, which have been temporarily waived for data center infrastructure, contribute to the existing uncertainty in the market. However, the quarter’s results have offered additional comfort about the sustainability of hyperscaler capital expenditures.

In conclusion, despite the lowered price target, BMO Capital’s analysis suggests that Celestica’s stock continues to be an attractive investment, underpinned by solid competitive advantages and positive financial developments.

In other recent news, Celestica Inc . reported first-quarter earnings and revenue that exceeded analyst expectations. The company posted adjusted earnings per share of $1.20, surpassing the analyst estimate of $1.12, and achieved revenue of $2.65 billion, beating the consensus forecast of $2.56 billion. This represented a 20% increase year-over-year. Despite these strong results, the company’s stock declined, as investor focus shifted to guidance that was only modestly above consensus. For the second quarter of 2025, Celestica provided guidance for adjusted EPS of $1.17-$1.27 on revenue of $2.575-$2.725 billion. The midpoints of these ranges were slightly above analyst expectations. Celestica also raised its full-year 2025 outlook, projecting revenue of $10.85 billion and increasing its adjusted EPS guidance to $5.00. The company’s Connectivity & Cloud Solutions segment saw revenue jump 28% year-over-year to $1.84 billion, while the Advanced Technology Solutions segment grew 5% to $0.81 billion.

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