Celstica Shares Slide Further

Celestica Inc. (CLS) shares dipped to their lowest level since mid-January, falling more than 2% to C$4.78 in early Wednesday morning trading. At 12:30 p.m. ET. on Wednesday, shares were slightly on the rebound trading at C$4.93, down C$0.08. In New York, the stock was down $0.17 to $3.96

After hitting a low of C$4.62 on January 16, Celestica shares revved up and hovered near C$10 for most of the spring. Unfortunately, the credit crunch alongside growing fears of an economic slowdown took a strangle hold on the market and since the beginning of summer, stock in the computer hardware manufacturer has had a rough ride downward.

On Wednesday, RBC Capital Markets analyst Amit Daryanani told clients it may get worse for Celestica, not for the stock necessarily, but certainly for its near term earnings.

The analyst  said in a research note:

We are lowering our numbers of Celestica (and other supply chain companies) for the second time since early September to reflect further end-market softness indicated by OEM commentary and our checks that indicate that the December quarter will be down to flat quarter-over-quarter for a majority of the hardware companies.

He lowered his September quarter EPS from $0.19 to $0.17 on sales of $1.9-billion. His December quarter estimate is the same.

Regarding Celestica stock, Mr. Daryanani sees minimal downside in the near term but also see minimal upside for it. He lowered his price target from $9 to $5 and maintained his "sector perform" rating.