Q: How is Celestica's current valuation, after this AI related pullback, last week ?
What is the level of debt and is it sustainable ?
What is the risk/reward to own/add shares at these levels ?
Thank You
What is the level of debt and is it sustainable ?
What is the risk/reward to own/add shares at these levels ?
Thank You
5i Research Answer:
CLS is 47X earnings now but that is using 2025 numbers. But since it is near year-end, if we look to 2006E then P/E drops to 33X. Net debt is $600M, fully sustainable based on cash flow and expected growth. There are always risks, and it is a volatile stock. But it continues to execute very well and growth prospects still look very strong overall. We would still consider it one of our favourite tech-related Canadian stocks. Investors should expect 15%+ moves, however, on bad news or bad market days. But the $500+ average target price we think is not unrealistic.