On Thursday, BMO Capital Markets increased the stock price target for Celestica (NYSE:CLS) to $72 from $64, while maintaining an Outperform rating on the stock. The adjustment follows Celestica's robust third-quarter performance for 2024 and positive guidance.
Celestica's strength in its Communications and Enterprise segment, particularly the switching business, was a key driver of the positive results. This performance helped to balance a softer quarter and outlook for the Advanced Technology Solutions (ATS) segment. The company also publicized significant wins, including a partnership with Groq for AI servers and a 1.6T switching contract with a major hyperscaler.
The analyst from BMO Capital Markets expressed confidence in the durability of the AI capital expenditure cycle and Celestica's market position. This sentiment is based on the belief that the stock's current valuation does not fully reflect the company's potential. The analyst highlighted Celestica's consistent margin execution as another reason for the positive outlook on the stock.
Celestica's recent achievements and guidance indicate a strong position in the market, with expectations of continued growth and performance. The raised price target to $72 reflects the analyst's optimism about the company's future prospects and potential for further stock price increases.
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