CLS Should I Buy
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Celestica Inc. (CLS) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown strong financial growth in its latest quarter and has positive analyst sentiment, the recent price decline, negative technical indicators, and news of potential risks related to losing Google's assembly work make it prudent to hold off on buying until the stock stabilizes or shows clearer upward momentum.
The MACD is negatively expanding (-1.805), indicating bearish momentum. RSI is at 35.415, which is neutral but nearing oversold territory. Moving averages are converging, suggesting indecision in the market. The stock is trading near its S1 support level of 272.467, with resistance at 294.818. Overall, the technical indicators suggest a bearish trend.
Strong financial performance in Q4 2025, with revenue up 43.57% YoY and net income up 76.33% YoY.
Analyst upgrades, including Barclays raising the price target to $391 and BofA initiating coverage with a $400 target, citing AI-driven growth opportunities.
Hedge funds are significantly increasing their positions, with a 309.07% increase in buying activity last quarter.
News of potential loss of Google's assembly work for AI servers, which has already impacted the stock price.
Insider selling activity, with Officer Phillips Jason planning to sell $33.1 million worth of shares.
Technical indicators showing bearish momentum and a recent price decline of -7.07% in the regular market session.
In Q4 2025, Celestica reported strong growth: Revenue increased by 43.57% YoY to $3.65 billion, net income rose by 76.33% YoY to $267.5 million, EPS grew by 79.07% YoY to $2.31, and gross margin improved by 2.67% YoY to 11.52%.
Analysts are generally positive on Celestica, with multiple firms raising price targets and maintaining Buy or Overweight ratings. Barclays sees potential for upward revisions to fiscal 2026 guidance, and BofA highlights AI-driven growth opportunities. However, TD Cowen and Citi have slightly more conservative views, with Hold and reduced price targets, respectively.
