Celestica Inc. (CLS): A Bull Case Theory

We came crossed a bullish thesis connected Celestica Inc. connected R. Dennis’s Substack by OppCost. In this article, we volition summarize the bulls’ thesis on CLS. Celestica Inc.'s share was trading astatine $333.17 as of January 27th. CLS’s trailing and forward P/E were 54.17 and 40.32 respectively according to Yahoo Finance.

Celestica Inc., unneurotic with its subsidiaries, provides proviso concatenation solutions successful Asia, North America, and internationally. CLS presents a compelling concern accidental done the strategical merchantability of heavy out-of-the-money enactment options, specifically the January 16, 2026, $190 strike, precocious transacted successful 2,800-contract organization blocks. Trading adjacent $304, Celestica has transformed from a low-margin Electronics Manufacturing Services supplier into a high-margin Connectivity & Cloud Solutions partner, driven by Hardware Platform Solutions (HPS) for hyperscale and AI information centers.

This structural pivot has expanded margins to 7.6% and established sticky, high-value lawsuit relationships with Meta, Microsoft, Amazon, and Google. The enactment strategy efficaciously creates a bounds bid to get a high-growth institution astatine a important discount portion generating contiguous premium income, enhanced by borderline ratio nether portfolio borderline rules.

The AI Capex supercycle underpins durable gross visibility, as hyperscalers collectively program implicit $400 cardinal successful infrastructure spending done 2026–2027. Celestica’s products—networking switches and ultra-dense retention solutions—are integral to the cognition of these AI data centers, and the company’s aboriginal engagement successful open-hardware plan ensures multi-year accumulation contracts and gross stability. Technical investigation reinforces the $190 onslaught arsenic a beardown support, good beneath the 200-day moving average, with elevated implied volatility providing further premium advantage.

Celestica’s fortress-like equilibrium sheet, escaped currency travel of $425 million, debased debt-to-equity ratio of 0.37, and NCIB stock repurchase programme adhd further safety. Stress tests amusement that a driblet to $190 would necessitate catastrophic gross collapse, borderline compression, oregon utmost aggregate contraction, each statistically unlikely. Overall, selling the $190 puts offers asymmetric risk-reward: a high-probability income-generating strategy portion positioning for ownership of a structurally transformed, high-growth AI infrastructure enabler astatine a deep-value price, aligning smart-money condemnation with disciplined worth investing principles.