Section1: Company Overview and Fundamental Insights:

1.1 Company Overview:

Celestica Inc (TSX: CLS) offers supply chain solutions. The firm operates in two segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). ATS segment consists of the ATS end market and is comprised of A&D, Industrial, Energy, HealthTech, and Capital Equipment businesses. Capital Equipment business is comprised of our semiconductor, display, and power & signal distribution equipment businesses. CCS segment that derives majority revenue consists of Communications and Enterprise end markets. etc.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~41.81% of the total shareholding. Letko, Brosseau & Associates Inc. and Pzena Investment Management, LLC holds a maximum stake in the company at ~­­­12.03% and ~6.91%, respectively.

1.4 Key Metrics:

The company reported robust growth in its financials on a sequential basis as well as in Q2 2022, along elevated cash deposits from customers, which is a key positive. The company is also improving its cash flows demonstrating its strength and adaptability.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of its recent activities, such as announcement regarding unveiling of new generation products and higher guidance on revenue for Q3 2022.

2.2 Insights of Q2 2022 Financial Performance:

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV to Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 3, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

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