Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 6 Aug, 24 | CLS | Buy | USD 46.88 | USD 52.0 | USD 55.9 | 9 days | 19.2% |
Data Powered by EOD Historical Data (“EODHD”).
Celestica Inc. provides supply chain solutions in North America, Europe, and Asia. It operates through two segments: Advanced Technology Solutions, and Connectivity & Cloud Solutions. The company offers a range of product manufacturing and related supply chain services, including design and development, new product introduction, engineering services, component sourcing, electronics manufacturing and assembly, testing, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics, asset management, product licensing, and after-market repair and return services. It also provides hardware platform solutions, which includes development of infrastructure platforms, and hardware and software design solutions and services which is used as-is or customized for specific applications; and management of program including design and supply chain, manufacturing, and after-market support, including IT asset disposition and asset management services. The company offers its products and services to original equipment manufacturers, cloud-based, and other service providers, including hyperscalers, and other companies in aerospace and defense, industrial, HealthTech, capital equipment, and communication and enterprise markets. Celestica Inc. was incorporated in 1994 and is headquartered in Toronto, Canada.
Improving Profitability: Gross Margin of 10.4% in Q1 FY24 vs 8.9% in Q1 FY23
Lower Cash Cycle: 106.6 Days in Q1 FY24 vs 119.6 Days in Q1 FY23
Lower Liquidity: Current Ratio of 1.42x in Q1 FY24 vs Industry Median of 2.05x
Balance Sheet Risk: Debt-Equity Ratio of 0.49x in Q1 FY24 vs Industry Median of 0.30x
Dependency on a limited Number of customers, Inherent challenges in managing changes in customer demand, Dependency on third parties to supply certain materials, Inventory risk, Cyclical semiconductor industry, etc
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 46.88 | 39.0 | 52.0 | 55.9 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
CLS's stock price has found support near the rising trendline, enabling it to rise and potentially foreshadowing a near-term upswing. Consequently, the probability of a near-term reversal has increased. Moreover, the 14-period Relative Strength Index (RSI) is hovering near the midpoint, indicating that the stock is poised for a rebound and potentially poised to surge higher. Additionally, CLS's current price is trading above its 50-period simple moving average, which is expected to serve as a reliable support level in the near-term price fluctuations.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Celestica Inc. (NYSE: CLS)) at its current market price of USD 46.88 as of Aug 5, 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Electronic Components
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| CLS Celestica Inc. |
1.59 1.73% | 93.70 | 27.85 | 20.37 | 1.11 | 5.78 | 1.20 | 15.62 |
| APH Amphenol Corporation |
0.38 0.54% | 70.48 | 41.49 | 32.79 | 6.15 | 9.40 | 6.51 | 26.52 |
| HNHPF Hon Hai Precision Industry Co Ltd ADR |
0.10 0.93% | 10.90 | 10.86 | 8.47 | 0.0073 | 0.92 | 0.0057 | 0.11 |
| TEL TE Connectivity Ltd |
-0.505 0.35% | 144.28 | 23.48 | 18.83 | 2.68 | 3.73 | 2.85 | 14.55 |
| MRAAY Murata Manufacturing Inc |
-0.12 1.54% | 7.69 | 22.29 | 13.99 | 0.02 | 2.07 | 0.02 | 0.08 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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