Celestica: Entrenched AI Infrastructure Partner With Upgraded Long-Term Growth Outlook and Undervalued 2027 Earnings Power

Thanos Moschopoulos, an analyst from BMO Capital, maintained the Buy rating on Celestica. The associated price target is $370.00.

Thanos Moschopoulos has given his Buy rating due to a combination of factors tied to Celestica’s recent performance and forward outlook. He highlights that the company delivered meaningful upside versus consensus on revenue, earnings, and free cash flow, underpinned by particularly strong growth in communications and switching products and improving margins. He also emphasizes that management’s significantly higher capital expenditure plans, while initially viewed negatively by the market, actually reflect strong, long-duration demand visibility through 2027, especially from large cloud and AI customers. In his view, this growth profile, combined with Celestica’s role as a preferred manufacturing partner for critical AI infrastructure (such as Google’s TPU systems), enhances the durability of the company’s competitive position.

Moschopoulos further points to robust growth with Celestica’s three largest customers—believed to include Google, Meta, and Amazon—as evidence of the company’s entrenched role in the ongoing AI-driven capex cycle. The raised guidance for both 2026 and 2027, including higher revenue and EPS targets and reaffirmed margin and free cash flow goals, supports his conviction that earnings power is trending above prior expectations. Despite this upgraded outlook, he views the current valuation as not fully reflecting Celestica’s growth trajectory and strategic positioning in AI-related hardware manufacturing. Based on this combination of strong execution, enhanced visibility, and an attractive risk‑reward trade‑off, he maintains an Outperform (Buy) rating with a target price that assumes a premium multiple on 2027 earnings.

In another report released today, Citi also maintained a Buy rating on the stock with a $338.00 price target.

CLS’s price has also changed dramatically for the past six months – from C$278.360 to C$403.890, which is a 45.10% increase.