BofA Securities has opened coverage on Celestica (NYSE: CLS) with a Buy rating and a $400.00 price objective, the firm said on Wednesday. At the time of the note, Celestica shares were trading at $333.17. InvestingPro data cited in the research note shows the stock has returned 252% over the past year, and analysts continue to hold a buy consensus on the name.
The research team at BofA identified Celestica as a leading supplier of white-box switches, positioning the company to benefit from what the firm describes as an AI-driven upgrade cycle in high-speed data center switching. BofA also pointed to robust expansion in custom ASIC accelerated servers as a complementary growth vector.
Industry classification from InvestingPro lists Celestica in the Electronic Equipment, Instruments & Components sector, noting revenue growth of 22.09% over the last twelve months. BofA emphasized that Celestica has maintained a first-mover advantage across 400G, 800G, and 1.6T switching technologies, and the firm expects the company to continue taking share in those faster-speed segments.
Looking ahead, BofA projects fiscal 2027 will be a particularly strong period for Celestica as numerous new programs ramp, and the firm’s earnings estimates sit above current Street consensus. BofA’s $400 price target is derived from applying a 32 times multiple to calendar 2027 estimated EPS of $12.36. That multiple produces a PEG ratio of 0.7x under BofA’s scenario, a figure the firm says supports the view that the stock remains undervalued relative to its projected earnings trajectory.
BofA noted Celestica’s present PEG ratio of 0.48, an indication the company is trading at a relatively low price-to-earnings ratio when compared with near-term expected earnings growth. The firm also flagged Celestica’s current P/E of 53.91 in the note.
Other broker activity referenced in the note includes Aletheia Capital raising its price target on Celestica to $410 from $330 while maintaining a Buy rating; that adjustment reflects expectations for a tripling of earnings per share between fiscal 2025 and fiscal 2027 driven by growth across several business segments. Separately, BMO Capital reiterated an Outperform rating and a $370 price target ahead of Celestica’s fourth-quarter 2025 results, citing an anticipated strong quarter in the company’s Tensor Processing Unit business that could influence fiscal 2026 results. BMO also named Celestica among its top Canadian technology picks for 2026.
In corporate governance news, Celestica announced that Dr. Luis Müller intends to resign from the board of directors, including his role as chair of the audit committee, effective following the board meeting on January 28, 2026. The company said the resignation is for personal reasons and not the result of any disagreement with the company.
This collection of analyst views, valuation metrics, and management-level changes frames the near-term and medium-term outlook for Celestica, with particular emphasis from BofA on data center switching and ASIC-accelerated server opportunities as the company's primary growth catalysts through 2027.
Clear summary
BofA Securities launched coverage of Celestica with a Buy rating and a $400 target, citing the company’s white-box switching leadership and exposure to AI-driven data center upgrades. BofA’s valuation uses a 32x multiple on calendar 2027 EPS of $12.36, equating to a PEG of 0.7x and supporting the firm’s view of continued upside as new programs scale. Other broker actions and a planned board resignation were also disclosed.
Key points
- BofA starts coverage with a Buy rating and $400 price target; shares trading at $333.17 at the time of the note.
- BofA highlights Celestica’s leadership in white-box 400G, 800G, and 1.6T switching and expects market share gains amid AI-driven data center upgrades and growth in custom ASIC accelerated servers.
- Analysts including Aletheia Capital and BMO Capital have recently adjusted targets and ratings; Aletheia raised its target to $410 and BMO reiterated Outperform with a $370 target.
Risks and uncertainties
- Execution risk tied to the timing and success of the new program ramps expected to drive fiscal 2027 results; the firm’s outlook depends on those programs progressing as anticipated.
- Valuation metrics show divergence - Celestica’s current P/E of 53.91 contrasts with a PEG ratio of 0.48, highlighting sensitivity to earnings delivery and market multiple shifts.
- Governance change with the announced resignation of Dr. Luis Müller from the board and as audit committee chair creates an uncertainty in board composition; the company stated the departure is for personal reasons and not due to disagreement.