Celestica Inc – Advancing Progress and Creating Value

Global Leader in Electronics Manufacturing Services

Headquartered in Toronto (Toronto Stock Exchange listing), Canada, Celestica Inc. is a global leader in electronics manufacturing services (EMS), offering end-to-end supply chain solutions, advanced manufacturing services, and innovative design capabilities.

Core Industries Served

Celestica supports a diverse range of industries with tailored solutions:

• Enterprise & Cloud Computing: Data centers, servers, and storage systems.

• Communications: Networking equipment and telecommunications systems.

• Aerospace & Defence: Avionics, radar systems, and mission-critical components.

• Industrial & Smart Energy: Robotics, automation, renewable energy systems, and power distribution.

• Healthcare: Medical devices and diagnostic equipment.

Comprehensive Service Offerings

1. Design & Engineering: From product development to prototyping.

2. Supply Chain Management: Streamlined procurement, logistics, and inventory optimization.

3. Manufacturing: Expertise in printed circuit board assembly and systems integration.

4. Aftermarket Services: Repairs, upgrades, and end-of-life product management.

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Financial Highlights (2024)

Third Quarter Performance (Q3 2024)

• Revenue: CAD 3.38 billion (+22% YoY).

• Operating Margin: 6.7% (up from 5.7%).

• EPS: CAD 1.40 (+60% YoY from CAD 0.88).

• ROIC: 28.6% (up from 21.5%).

• Free Cash Flow: CAD 100.58 million (up from CAD 46.04 million).

Full-Year 2024 Outlook

• Revenue: Revised to CAD 12.96 billion (up from CAD 12.78 billion).

• Non-IFRS Operating Margin: 6.5% (up from 6.3%).

• Adjusted EPS: CAD 5.20 (previously CAD 4.89).

• Adjusted Free Cash Flow: CAD 371.25 million (up from CAD 337.50 million).

2025 Projections

• Revenue: CAD 14.04 billion.

• Non-IFRS Operating Margin: 6.7%.

• Adjusted EPS: CAD 5.97.

• Adjusted Free Cash Flow: CAD 438.75 million.

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Strategic Initiatives Driving Growth

1. Industry Diversification:

   • Expansion into high-margin sectors like aerospace, defence, renewable energy, and healthcare.

   • Rising demand for advanced manufacturing in AI/IoT-enabled devices and renewable energy.

2. Design & Engineering Innovation:

   • Enhanced focus on product design, prototyping, and systems integration.

3. Supply Chain Resilience:

   • Leveraging digital tools, AI-driven logistics, and robust supplier networks to counter global disruptions.

4. Geographic Expansion:

   • Strengthening market presence in Asia-Pacific and Europe.

5. Sustainability & Technology Integration:

   • Commitment to green manufacturing processes and adoption of cutting-edge technologies like AI, IoT, and 5G.

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Key Challenges and Risks

1. Macroeconomic Uncertainty: Global economic challenges and geopolitical tensions.

2. Intense Competition: Rivalry with major players like Flex, Jabil, and Foxconn.

3. Supply Chain Constraints: Ongoing component shortages.

4. Customer Concentration: Heavy reliance on a few key clients.

5. Technological Demands: Continuous need for innovation to stay competitive.

6. Margin Pressures: Cost-intensive operations and pricing challenges.

7. Regulatory Compliance: Increasing costs, especially in defence and healthcare.

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Stock Performance and Technical Outlook

Key Highlights

• Price Trend:
  Celestica’s stock shows robust upward momentum, driven by strong earnings and positive revenue guidance.

• Relative Strength (RS):
  A steadily climbing RS score indicates sustained growth potential.

Technical Indicators

1. Moving Averages:

   • Trading above both the 50-day and 200-day moving averages, signaling short- and long-term strength.

2. Relative Strength Index (RSI):

   • Current levels (65–70) suggest a slightly overbought condition, common in strong bullish trends.

3. MACD:

   • Positive divergence confirms bullish momentum.

4. Volume Analysis:

   • Elevated trading volumes underscore investor interest and validate price rallies.

Chart Patterns

• Breakout from Resistance:
  Recent breakthroughs of resistance levels now serve as support, reflecting confidence in the stock’s performance.

• Cup-and-Handle Formation:
  Emerging patterns indicate potential for significant upward movement.

• Fibonacci Retracement:
  The stock remains above the 38.2% retracement level, suggesting strong support for continued growth.

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Investment Strategy

• Short-Term Traders: Enter during pullbacks near the 50-day MA.

• Long-Term Investors: Strong fundamentals and upward trends make the stock attractive for long-term holding.

Target Price Ranges

• 6-Month: CAD 236.25–249.75 (USD 175.00–185.00).

• 1-Year: CAD 270.00–283.50 (USD 200.00–210.00).

• 3-Year: CAD 337.50–371.25 (USD 250.00–275.00).

Note: These targets are speculative and depend on broader market conditions, company performance, and macroeconomic factors and moreover are derived from ChatGPT providing long term chart and other data points.

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Conclusion

Celestica Inc. is positioned for long-term growth, supported by strategic diversification, robust financial performance, and strong technical indicators. While challenges persist, effective management of risks and continuous innovation could unlock significant value.

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Disclaimer: This document is for informational purposes only and does not constitute any investment advice. Opinions expressed are personal and may be biased and contain inaccuracies.