CLS

Celestica, Inc.

TMT


Presented:08/31/2023
Price:$23.31
Cap:$3.06B
Current Price:$61.11
Cap:$7.25B

Presented

Date08/31/2023
Price$23.31
Market Cap$3.06B
Ent Value$2.17B
P/E Ratio16.86x
Book Value$14.09
Div Yield0%
Shares O/S131.12M
Ave Daily Vol1,506,902
Short Int1.58%

Current

Price$61.11
Market Cap$7.25B
Celestica, Inc. engages in the provision of supply chain solutions globally to equipment manufacturers and service providers. It operates through the following segments: Advanced Technology Solutions (ATS), and Connectivity and Cloud Solutions (CCS). The Advanced Technology Solutions (ATS) segment includes aerospace and defense, industrial, smart energy, health tech, and capital equipment businesses. The Connectivity and Cloud Solutions (CCS) segment consists of enterprise communications, telecommunications, servers, and storage businesses. The company was founded in 1994 and is headquartered in Toronto, Canada.

Publicly traded companies mentioned herein: Celestica Inc (CLS), Flex Ltd (FLEX), Jabil Inc (JBL)

Highlights

The presenter is long shares of Celestica Inc (CLS), an electronics manufacturing services (EMS) company that competes with JBL and FLEX. 55% of revenues come from the Connectivity & Cloud Solutions (CCS) segment, with the remaining 45% attributable to the Advanced Technology Solutions (ATS) business. CLS has a strong track record of beat-and-raises, and the presenter expects that to continue as he is 10% and 20% above consensus 2024 revenues and EPS, respectively. At the current $23 share price, the stock trades at approximately 7.5x his 2024 EPS and 9x the Street’s $2.51 estimate. He expects multiple expansion based on earnings beats and his analysis that the market has not yet given CLS credit for its AI exposure, culminating in a $30 price target based on 10x his 2024 EPS. 

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Idea Discussion

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