UBS Upgrades $CLS to Buy, Raises Price Target to $430

UBS upgraded Celestica ($CLS) to Buy from Neutral and raised its price target to $430 from $410, according to analyst David Vogt.
The analyst cited strong AI-driven demand for Ethernet switching and AI/ML compute, along with a 1.6T rack-scale solution for OpenAI, as factors expected to accelerate revenue and EPS growth in CY27. UBS forecasts a roughly 50% two-year EPS compound annual growth rate to $24.72 in CY28 from $10.83 in CY26.
With shares trading at about 12x UBS's CY28 EPS forecast, the firm said the market appears to be pricing in less than half the growth it models, and sees favorable risk/reward even without multiple expansion from the current ~20x next-twelve-month P/E.
Key drivers cited include scale-out and scale-up switch demand from Google, Amazon, and Meta (including AMD Helios), which UBS expects to drive a ~40% three-year CAGR in Communications revenue; supply chain checks pointing to custom ASIC demand from hyperscalers like Google and OpenAI driving ~127% Enterprise revenue growth in CY27; and gross margin likely capped in the mid-11% range in CY27–CY28, with operating margin still expected to rise to 8.83% in CY28 from 8.35% in CY26.