RBC Dominion Securities analyst Paul Treiber raised his aim worth on Celestica (Celestica Stock Quote, Chart, Info, Analysts, Financials NYSE:CLS) to US$315.00 from $225.00, whereas sustaining an “Outperform” rating in an Oct. 23 report, citing “sturdy AI capex progress” and continued program wins that assist every revenue and margin development via 2027.
“With continued sturdy AI capex progress and Celestica’s new program win momentum, we see sturdy revenue progress and margin development via FY26 and FY27,” Treiber acknowledged. “In delicate of robust progress, we anticipate Celestica’s valuation to remain above buddies and within the route of the extreme end of its historic range.”
Treiber expects Celestica’s third-quarter outcomes, susceptible to be launched on Oct. 27, to beat Avenue estimates and fast an upward revision to full-year guidance.
“Whereas we anticipate FY26 guidance to be conservative, Celestica has averaged exact revenue 13% and adjusted EPS 36% above preliminary annual guidance over the last two years,” he acknowledged.
RBC’s revised estimates identify for revenue of US$14.2-billion and adjusted EPS of US$7.15, every above consensus at US$14.0-billion and US$6.89, respectively.
“Rising AI capex underpins Celestica’s progress momentum,” Treiber acknowledged, noting that consensus forecasts for capital expenditures on the prime 5 U.S. hyperscalers: Google, Meta, Amazon, Microsoft, and OpenAI, have elevated 11% for 2026 and 17% for 2027 over the earlier three months.
“Just a few of Celestica’s largest prospects have launched important development plans, which bodes successfully for revenue from present functions. Our outlook requires hyperscaler revenue to increase 30% year-over-year in FY26 and 25% in FY27.”
Treiber moreover highlighted Celestica’s rising place in personalized ASIC functions and Ethernet change manufacturing.
“Celestica is successfully positioned to revenue from the 1.6T Ethernet product cycle,” he acknowledged. “It’s one in all many prime three distributors for Ethernet switches for data centres and continues to appreciate share as hyperscalers prioritize high-performance (800G) switches from ODMs.”
He acknowledged that the not too way back launched DS6000 1.6T Ethernet change enhances investor visibility into the next primary enhance cycle, anticipated to start out in calendar 2026.
Believing Celestica’s premium valuation is justified by its combination of higher-margin, higher-quality revenue, Treiber acknowledged the model new aim relies on 35× CY27 P/E, up from 29×, “given better visibility to EPS progress via CY27 and Celestica’s rising publicity to hyperscaler and HPS/ODM segments.”
“Celestica is shopping for and promoting at 42× next-12-month earnings, near the best of its 10-year historic range and successfully above EMS buddies at 19×,” he acknowledged. “We anticipate the premium to be sustained as progress visibility and profitability improve.”
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