Argus Analyst Sees Celestica Inc. (NYSE:CLS) Benefiting From Diversification and AI Trends

Argus analyst Jim Kelleher recently lowered the price target on Celestica Inc. (NYSE:CLS) to $120 from $150 but kept a Buy rating on the shares after its Q1 earnings and revenue beat. CLS offers a range of product manufacturing and related supply chain services.

In an investor note, the analyst noted that the company was benefiting from a portfolio diversification strategy focusing on high-growth, high-margin businesses as well as from trends in artificial intelligence and machine learning.

Argus added that while shares had weakened on rotation away from companies who were participating in the generative AI revolution, the company's demand fundamentals appeared intact and margins were expanding.

During the latest earnings disclosure, the firm raised the full-year 2025 revenue outlook to $10.85 billion, reflecting 12% year-over-year growth, and increased the adjusted EPS target to $5.00. For Q2 2025, revenue is projected between $2.575 billion and $2.725 billion, with adjusted EPS guidance of $1.17 to $1.27. The adjusted operating margin is expected to reach 7.2% at the midpoint.

While we acknowledge the potential of CLS, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CLS and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.