Yahoo Finance Celestica Inc. Just Beat EPS By 44%: Here's What Analysts Think Will Happen Next
Shareholders might have noticed that Celestica Inc. (TSE:CLS) filed its first-quarter result this time last week. The early response was not positive, with shares down 2.0% to CA$59.12 in the past week. Revenues were US$2.2b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.85, an impressive 44% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Celestica
Taking into account the latest results, the current consensus from Celestica's nine analysts is for revenues of US$9.14b in 2024. This would reflect a solid 9.7% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 10% to US$2.98. In the lead-up to this report, the analysts had been modelling revenues of US$8.78b and earnings per share (EPS) of US$2.33 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a massive increase in earnings per share in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 103% to CA$32.99per share.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Celestica's past performance and to peers in the same industry. It's clear from the latest estimates that Celestica's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 6.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Celestica is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Celestica's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Celestica going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Celestica (1 makes us a bit uncomfortable!) that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
