CLS - Assessing Celestica's Near-Term Prospects Given Meteoric Rise

2024-06-10 11:52:15 ET

Summary

• Celestica Inc.'s revenue for Q1 2024 exceeded expectations, driven by strong growth in the CCS segment.
• The company's EPS guidance for the next quarter anticipates a higher tax rate that may not materialize.
• Celestica raised its full-year outlook for 2024 based on the visibility it has.
• Given the Celestica tax situation and secular tailwinds in AI, the guidance for the next quarter seems low.

Celestica Inc. ( CLS ) is still a buy or hold that requires ongoing monitoring. In my previous write-up on Celestica, I called it a buy based on an earnings prediction methodology I've been experimenting with. In the case of Celestica that turned out well because it is up some 85% since. Because it has run up so much in such a short amount of time, I wanted to review whether it is still a hold....

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