Q: AI related spending/margin concerns have hit the market over past week and CLS has declined to below $400, again.
Any concerns ? Do you still expect the stock to trade to $500 over 12-18 months ?
Is it safe to add now or wait for a further pull back ?
Thanks
Any concerns ? Do you still expect the stock to trade to $500 over 12-18 months ?
Is it safe to add now or wait for a further pull back ?
Thanks
5i Research Answer:
'Sentiment' has shifted on AI but fundamentals really have not. But sentiment is a much harder thing to predict. Year-end can also see some unusual, not-fundamentally-related trading in sectors. We are not particularly concerned on CLS. It continues to execute well and is in solid financial shape. Nearly all its customers (the ones disclosed, anyway) increased capex budgets recently. $500 would be a 25% gain in the stock. The overall market would need to co-operate, but under normal conditions (are there any normal markets?) we think that is certainly doable.