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![CorleoneDon77 Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::1577382889104318472.png) DonCorleone77 [@CorleoneDon77](/creator/twitter/CorleoneDon77) on x 5531 followers
Created: 2025-07-21 18:06:16 UTC

$CLS

Attached is page X of a 22-page (Coverage Initiation) Citi analyst report on CLS issued yesterday entitled:

"Stock Fairly Valued After YTD Run; Initiate Neutral with $XXX TP"

Citi has a 'Neutral' rating on CLS with a $XXX price target.

Citi's 'Take' regarding CLS in the report includes the following:

"CLS stock is up 70%+ YTD, reflecting strong share gains in the AI back-end switch market to 30%+ on early 800G hyperscale greenfield investments. We believe 800G ramp is still early and expect major share shifts from branded vendors like Arista and Nvidia long-term. 

We believe the stock’s high-20s P/E multiple could sustain in the mid-term; however, we note that CLS multiple contracted once white box share of the 400G market declined after the initial ramp. 

Our CY25/26 estimates are roughly in-line with the Street, and our target price of $XXX is based on ~28x P/E multiple or in-line with the closest AI-exposed EMS peer Fabrinet times our FY26 EPS.

Premium valuation:

CLS stock trades ~26x P/E or in-line with closest AI EMS peer Fabrinet, ~2x premium to the stock’s 3-year average, ~1.5x premium to traditional EMS peers like JBL/FLEX, and 1.8x premium to Taiwan ODM peers Wiwynn/Accton, reflecting growing market share in the data center switch market.

-- Valuation:

Our $XXX target price is based on ~28x P/E multiple times our FY26 EPS. This multiple is roughly in line with its closest AI EMS peer Fabrinet based on profitability comps. Our multiple is at a ~2x premium to the stock’s 3-year P/E average of 12x due to the company’s growing market share in the data center switch market and opportunities to broaden its customer base with the expanding deployment of AI. 

Moreover, our multiple is at a 1.5x premium to traditional EMS peer average (JBL/FLEX) and 1.8x premium to Taiwan white box ODMs (Wiwynn/Accton). We believe 800G ramp is still early and P/E multiple could remain elevated in the mid-term; however, we note the CLS multiple contracted once white box share of the 400G market declined after the initial adoption.

-- Upside risks to our target price include: 

1) a more rapid expansion of AI-related opportunities to non-hyperscale customers including sovereign governments, large enterprises, and specialty cloud providers; 
2) increased adoption of white box solutions in traditional data center switching, server, or storage markets by existing and new customers; 
3) stronger sales due to growth in new markets or from new solutions; and 
4) higher gross margins from a more favorable mix.

-- Downside risks to our target price include: 

1) weaker sales due to changes in or the loss of a program with either of Celestica’s two top customers; 
2) share loss and weaker sales due to competitive pressures from other EMS players and/or white box providers, related to pricing or product offerings; 
3) lower gross margin due to stronger EMS sales or pricing pressure from larger turnkey HPS solutions; and
4) new/increased tariffs or trade restrictions."

(Page X is not available here as X does not allow me to post pages from reports on this platform)


XXX engagements

![Engagements Line Chart](https://lunarcrush.com/gi/w:600/p:tweet::1947357474803355732/c:line.svg)

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