Celestica (CLS) Expected to Post Strong Earnings Growth

Investors are optimistic as Celestica is set to report a significant earnings increase and revenue growth, indicating strong financial performance ahead. The company remains competitive within its sector, although it ranks lower in industry performance.

Date: 03-10-2024

AI Rating: 7

Celestica (CLS) has shown promising performance in the recent trading sessions, evidenced by a +1.45% change, exceeding the S&P 500's meager gain of 0.01%. Over the past month, the stock has climbed by 6.85%, significantly outpacing the broader market and its sector.

The upcoming earnings report is anticipated to highlight an earnings per share (EPS) of $0.92, reflecting a robust year-over-year increase of 41.54%. Moreover, the projected revenue of $2.41 billion indicates a growth of 18.01% compared to the previous year. These figures bode well for investors, suggesting strong demand for Celestica's services and solid management of resources.

For the full year, EPS is estimated to reach $3.65, marking a remarkable 50.21% growth year-over-year, while revenue is expected to be around $9.47 billion, up by 18.93%. Such positive projections for both EPS and revenue should have a favorable impact on investors' sentiment and stock prices.

Regarding forecast adjustments, while the Zacks Consensus EPS estimate has remained stable, this could imply a consistent outlook, allowing investors to maintain confidence in anticipated financial health. The company's Zacks Rank of #3 (Hold) indicates some caution, but the overall trend in earnings growth could shift analysts’ perspectives positively, reflecting optimism about the company's profitability.

Additionally, Celestica trades at a Forward P/E ratio of 13.6, slightly below the industry's average of 13.7. This valuation could indicate a potential undervaluation of the stock, making it an attractive buy if growth projections materialize as expected.

However, it is essential to consider the industry context, as Celestica's sector ranks in the bottom 27% of all industries based on Zacks Rank. This underperformance could temper expectations slightly.

Stocks: CLS