Results: Celestica Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Last week, you might have seen that Celestica Inc. (TSE:CLS) released its first-quarter result to the market. 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. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Celestica

Taking into account the latest results, the consensus forecast from Celestica's nine analysts is for revenues of US$9.14b in 2024. This reflects a decent 9.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted 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 very substantial lift 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. 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 most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Celestica following these results. Happily, they also upgraded their revenue estimates, and are forecasting them 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 estimates - from multiple Celestica analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Celestica has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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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.