Celestica Reaches New Heights Amid Strong Market Trends
Celestica, a Zacks Rank #1 (Strong Buy), is among the world’s largest electronics manufacturers, providing supply chain solutions across North America, Europe, and Asia. Recently, the stock has shown remarkable momentum, reaching new all-time highs as investor interest grows.
Positive Stock Movement Signals Growth Ahead
The recent price action reflects investor confidence as we approach the New Year. Increased trading volume has drawn attention, indicating rising demand for shares in this top-ranked company.
As a member of the Zacks Electronics – Manufacturing Services industry, Celestica ranks in the top 6% out of over 250 industry groups. This favorable position suggests outperformance relative to the broader market in the next 3 to 6 months, continuing the trends of the past quarter:
Image Source: Zacks Investment Research
Additionally, metrics for this industry remain strong:
Image Source: Zacks Investment Research
Research shows that around half of a stock’s price changes are influenced by its industry group. Stocks from the top 50% of Zacks Ranked Industries tend to outperform the bottom half by more than twice as much.
About Celestica and Its Services
Celestica offers numerous services, including new product design, engineering, component sourcing, mechanical assembly, systems integration, and logistics.
The company is also involved in the AI sector, focusing on platform solutions and the development of infrastructure alongside hardware and software design services.
Celestica caters to hyperscalers, cloud providers, and original equipment manufacturers, serving industries like aerospace, defense, industrial equipment, and communications.
Robust Earnings Record
As a leading electronics manufacturer, Celestica (CLS) boasts a strong earnings performance, consistently meeting or exceeding expectations for years. The company has achieved an average earnings surprise of 13.2% over the last four quarters.
In October, Celestica reported third-quarter earnings of $1.04 per share, surpassing the consensus estimate of $0.94 by 10.6%. Its revenues reached $2.5 billion, exceeding expectations by 3.7%.
Analysts hold an optimistic view of the stock, with earnings estimates raised across the board. The fourth-quarter consensus EPS estimate climbed 7.22% over the past 60 days to reach $1.04. Should the company achieve this target, it would represent a year-over-year growth rate of 36.8%.
Image Source: Zacks Investment Research
Technical Analysis Indicates Further Gains
Celestica’s stock price has surged over 200% in 2024 alone. Such strong performance is indicative of stocks in a powerful uptrend. This exceptional momentum makes Celestica an attractive addition to an investment portfolio.
Image Source: StockCharts
The rising 50-day (blue line) and 200-day (red line) moving averages reveal a positive trend, as the stock has consistently reached new highs this year. With solid fundamentals and positive technical indicators, Celestica is well-positioned for continued success.
Research indicates a strong link between stock price movements and earnings estimate trends. Given Celestica’s recent positive revisions, if this trend continues along with consistent earnings performance, the stock is likely to maintain its upward trajectory.
Conclusion: Celestica Offers Compelling Investment Potential
Supported by a strong industry position and a history of positive earnings reports, Celestica stands out as a promising investment opportunity. The stock’s solid fundamentals and favorable technical trends justify consideration for inclusion in an investment portfolio.
Additionally, recent positive shifts in earnings estimates provide a cushion against potential market downturns. Investors should consider adding CLS to their watchlist if they haven’t done so already.
Zacks Names Top Semiconductor Stock
Although it is only 1/9,000th the size of NVIDIA, which has skyrocketed over +800% since our recommendation, our emerging top chip stock shows greater growth potential.
This company is well-equipped to meet the soaring demand for Artificial Intelligence, Machine Learning, and the Internet of Things. The global semiconductor market is predicted to grow from $452 billion in 2021 to $803 billion by 2028.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
