Celestica: Continue Walking The Bull Trail
Summary
- Celestica's robust growth is fueled by surging demand for hardware platform solutions, especially networking switches for hyperscalers.
- Recent US-China tariff reductions are a major positive catalyst, likely paving the way for future guidance upgrades, as management had earlier assumed no changes to tariff policies.
- Valuations are at a premium vs peers, but the risk here has eased slightly, as CLS stock today is at a lower premium vs peers than it was months ago.
- Technical analysis signals further upside potential versus the S&P 500.
- Downward consensus capex revisions for hyperscalers is a key risk, but let's not forget that absolute capex growth is still increasing and Celestica is gaining market share.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of CLS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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