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Celestica and Bloomin' Brands have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – September 3, 2024 – Zacks Equity Research shares Celestica (CLS - Free Report) as the Bull of the Day and Bloomin' Brands, Inc. (BLMN - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Dell Technologies Inc. (DELL - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Advanced Micro Devices Inc. (AMD - Free Report) .
Celestica Inc. is an electronics manufacturing services powerhouse benefitting from massive growth and capex spending across data centers, artificial intelligence, and other megatrends.
Celestica stock has soared 385% in the past two years, driven by its surging earnings outlook and AI-fueled growth. CLS shares have climbed 70% YTD to crush the Tech sector and giants such as Meta.
Celestica stock trades 25% below its average Zacks price target at roughly $50 per share, and at a 45% discount to the Zacks Tech sector in terms of forward 12-month earnings.
Celestica Stock 101
Celestica CLS is an electronics manufacturing services firm servicing companies across communications, aerospace and defense, industrial and energy, health tech, capital equipment, and other key areas. Celestica's portfolio includes design, manufacturing, hardware platform, and supply chain solutions.
Celestica operates two reportable units: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Celestica's services across these segments includes Design and Engineering, Manufacturing Services, Logistics and Fulfillment, Precision Machining, Product Licensing Services, and beyond.
For example, Celestica's capital equipment business features semiconductor wafer fabrication equipment, robotics and automated systems solutions, and display systems. Meanwhile, some of Celestica's vital hardware platform solutions are focused on rack integration services.
Celestica grew its revenue by 29% in 2022 and 10% in 2023. The company posted a beat-and-raise second quarter of 2024, expanding its adjusted earnings by 65%.
Celestica grew its Q2 revenue by 23%, fueled by a 51% increase in its Connectivity & Cloud Solutions segment.
The enterprise side of Celestica's CCS unit increased by 37%, "driven by strong demand for Artificial Intelligence/Machine Learning (AI/ML) compute products from our hyperscaler customers."
Celestica's Near-Term Growth Outlook
Celestica has topped our earnings per share estimates by an average of 12% in the trailing four quarters, including its 11% Q2 beat.
Celestica boosted its EPS guidance last quarter, with its third quarter estimate up 15% since its release, while its FY24 and FY25 consensus estimates surged 10% to help CLS earn a Zacks Rank #1 (Strong Buy). The recent upbeat EPS outlook extends Celestica's stellar run of upward revisions over the last year-plus.
Celestica is projected to grow its revenue by 19% this year and another 9% in 2025 to climb from $7.96 billion last year to $10.28 billion in FY25.
Celestica is projected to post 50% adjusted earnings per share growth this year and 9% higher next year, following 35% average adjusted EPS growth in the trailing four years.
Breaking Down Celestica Stock's Performance, Technical Levels and Valuation
Celestica shares have climbed 673% in the past five years, crushing the Zacks Tech sector's 140% and its Electronics - Manufacturing Services industry's 230%. The run snapped an extended period of underperformance for Celestica, with the stock now up 500% in the past 15 years vs. Tech's 580%.
Celestica stock has surged 115% in the past 12 months, blowing away many tech standouts and its industry's 17%. The impressive run includes a 20% drop from its mid-July highs.
Celestica is attempting to find support at its 21-week moving average after sliding from its most overbought RSI levels in the past decade earlier this year to neutral. CLS rebounded in early August before testing its 200-day moving average, with Celestica trading right at its 21-day.
Celestica stock trades at a 45% discount to the Zacks Tech sector at 14.6X forward 12-month earnings. Celestica's forward earnings multiple represents a 60% discount to its 10-year highs and not too much of a premium compared to its median, helping Celestica earn an "A" grade for Value in our Style Scores system.
Celestica also trades at 0.6X forward 12-month sales, roughly matching its industry's 0.5X, while offering staggering value compared to Tech's 6.3X.
Wrapping Up Celestica's Bull Case
Celestica is a $50-a-share tech stock trading 20% below its recent highs and 25% below its average Zacks price target despite blowing away the market and the Tech sector over the last few years.
The company's valuation is enticing and Celestica is poised to post booming earnings growth, supported by the rapid expansion of AI, data centers, and other vital growth areas of the U.S. economy that are floating above the broader economic slowdown.
Bear of the Day:
Bloomin' Brands, Inc. is the company behind Outback Steakhouse, Carrabba's Italian Grill, and other restaurant chains.
BLMN's earnings outlook has tanked since the start of 2023 as consumers pull back on spending. Bloomin' Brands posted another disappointing quarter in early August.
Bloomin' Brands Stock 101
Bloomin' Brands, Inc. BLMN is a casual dining restaurant giant, most famous for its Outback Steakhouse chain. The company also owns Carrabba's Italian Grill, Bonefish Grill, and Fleming's Prime Steakhouse & Wine Bar. Bloomin' Brands boasts that it owns and operates more than 1,450 restaurants across 46 states and 13 countries.
Bloomin' Brands is coming off a strong three-year stretch following its Covid tumble. Unfortunately, its sales have slowed since it posted 30% top-line expansion in 2021. The company grew its sales by 7% in 2022 and 6% last year. The company is projected to see its revenue slide 4% in 2024.
Bloomin' Brands missed our Q2 earnings per share estimate by 11% and provided downbeat guidance once again, with the casual dining industry "softer than anticipated." The causal dining space is suffering as consumer spending slows across the board as they start to wave the white flag amid lingering inflation.
Bloomin' Brands' third quarter EPS estimate has tumbled 49% in the last few months, with its FY24 and FY25 estimates roughly 15% lower, helping BLMN earn a Zacks Rank #5 (Strong Sell). The recent downward EPS revisions are part of a negative trend that began in early 2023.
Bloomin' Brands stock is down 3% in the past five years vs. its industry's 15% climb and the S&P 500's 95% surge. BLMN shares have tumbled 38% YTD.
Why Investors Might Want to Stay Away from Bloomin' Brands
Bloomin' Brands announced on Aug. 26 that Mike Spanos will take over as chief executive officer on September 3. Former CEO David Deno announced in early May his planned retirement.
It might be best to stay away from Bloomin' Brands until the company shows that a near-term bottom is in for this rough business cycle. Plus, its Retail – Restaurants industry is in the bottom 33% of over 250 Zacks industries.
Additional content:
Should You Start Accumulating Dell (DELL - Free Report) Shares After Q2 Results?
Dell Technologies Inc. reported impressive results for second-quarter fiscal of 2025, wherein both the top and the bottom line surpassed the Zacks Consensus Estimate. This was primarily driven by an 80% increase in server sales powered by artificial intelligence (AI) chips. The company also upwardly revised its full-year fiscal 2025 revenue guidance.
Dell Technologies currently carries a Zacks Rank #3 (Hold). This means that the stock price is expected to perform in line with the market in the near future. Investors should note that the magnitude and direction of estimate revisions could change following the company's just-released earnings report. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
DELL's Second-Quarter Earnings at a Glance
Dell Technologies reported quarterly adjusted earnings per share (EPS) of $1.89, beating the Zacks Consensus Estimate of $1.74. This compares to earnings of $1.74 per share a year ago. The company posted revenues of $25.03 billion, surpassing the Zacks Consensus Estimate by 3.03%. This compares to year-ago revenues of $22.93 billion.
DELL's Servers and Networking revenue came in at $7.76 billion, up 80% year over year and 82.3% sequentially. Within this, its AI-optimized servers sales rose about 23% sequentially to $3.2 billion in the second quarter.
The backlog for these AI servers was $3.8 billion at the end of the last reported quarter. DELL sells AI-optimized servers using GPUs of NVIDIA Corp.. It also uses the GPUs of Advanced Micro Devices Inc..
DELL has expanded its AI offerings in partnership with NVIDIA with "new server, edge, workstation, solutions and services advancements." On May 20, DELL announced the new Dell PowerEdge XE9680L server, which "offers direct liquid cooling and eight NVIDIA Blackwell Tensor Core GPUs for fast processing in a compact form factor."
DELL is benefiting from strong demand for AI servers driven by the ongoing digital transformation and heightened interest in generative AI applications. DELL's PowerEdge XE9680 AI-optimized server is in demand. Strong enterprise demand for AI-optimized servers is aiding DELL.
Earnings Estimates for DELL on the Rise
Dell Technologies upwardly revised for full fiscal 2025 revenues to the range of $95.5 - $98.5 billion from the previous range of $93.5 - $97.5 billion. Total revenue for fiscal 2024 was $88.4 billion. Management also forecast annual adjusted EPS of $7.80 (+/- $0.25). DELL projected revenues for the ensuing third-quarter in the range of $24 - $25 billion.
Dell Technologies has an expected revenue and earnings growth rate of 9.6% and 9.8%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for the current-quarter and current-year earnings has improved over the last 30 days.
Robust Price Upside for DELL Shares
Year to date, shares of Dell Technologies have jumped 49.1%. At the same time, the stock price has slumped nearly 34% since the company reported its fiscal first-quarter 2025 results. At present, the average stock price target of brokerage firms represents an increase of 38.3% from the last closing price of $110.74. The brokerage target stock price is currently in the range of $97-$186.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Celestica and Bloomin' Brands have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 3, 2024 – Zacks Equity Research shares Celestica (CLS - Free Report) as the Bull of the Day and Bloomin' Brands, Inc. (BLMN - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Dell Technologies Inc. (DELL - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Advanced Micro Devices Inc. (AMD - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Celestica Inc. is an electronics manufacturing services powerhouse benefitting from massive growth and capex spending across data centers, artificial intelligence, and other megatrends.
Celestica stock has soared 385% in the past two years, driven by its surging earnings outlook and AI-fueled growth. CLS shares have climbed 70% YTD to crush the Tech sector and giants such as Meta.
Celestica stock trades 25% below its average Zacks price target at roughly $50 per share, and at a 45% discount to the Zacks Tech sector in terms of forward 12-month earnings.
Celestica Stock 101
Celestica CLS is an electronics manufacturing services firm servicing companies across communications, aerospace and defense, industrial and energy, health tech, capital equipment, and other key areas. Celestica's portfolio includes design, manufacturing, hardware platform, and supply chain solutions.
Celestica operates two reportable units: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Celestica's services across these segments includes Design and Engineering, Manufacturing Services, Logistics and Fulfillment, Precision Machining, Product Licensing Services, and beyond.
For example, Celestica's capital equipment business features semiconductor wafer fabrication equipment, robotics and automated systems solutions, and display systems. Meanwhile, some of Celestica's vital hardware platform solutions are focused on rack integration services.
Celestica grew its revenue by 29% in 2022 and 10% in 2023. The company posted a beat-and-raise second quarter of 2024, expanding its adjusted earnings by 65%.
Celestica grew its Q2 revenue by 23%, fueled by a 51% increase in its Connectivity & Cloud Solutions segment.
The enterprise side of Celestica's CCS unit increased by 37%, "driven by strong demand for Artificial Intelligence/Machine Learning (AI/ML) compute products from our hyperscaler customers."
Celestica's Near-Term Growth Outlook
Celestica has topped our earnings per share estimates by an average of 12% in the trailing four quarters, including its 11% Q2 beat.
Celestica boosted its EPS guidance last quarter, with its third quarter estimate up 15% since its release, while its FY24 and FY25 consensus estimates surged 10% to help CLS earn a Zacks Rank #1 (Strong Buy). The recent upbeat EPS outlook extends Celestica's stellar run of upward revisions over the last year-plus.
Celestica is projected to grow its revenue by 19% this year and another 9% in 2025 to climb from $7.96 billion last year to $10.28 billion in FY25.
Celestica is projected to post 50% adjusted earnings per share growth this year and 9% higher next year, following 35% average adjusted EPS growth in the trailing four years.
Breaking Down Celestica Stock's Performance, Technical Levels and Valuation
Celestica shares have climbed 673% in the past five years, crushing the Zacks Tech sector's 140% and its Electronics - Manufacturing Services industry's 230%. The run snapped an extended period of underperformance for Celestica, with the stock now up 500% in the past 15 years vs. Tech's 580%.
Celestica stock has surged 115% in the past 12 months, blowing away many tech standouts and its industry's 17%. The impressive run includes a 20% drop from its mid-July highs.
Celestica is attempting to find support at its 21-week moving average after sliding from its most overbought RSI levels in the past decade earlier this year to neutral. CLS rebounded in early August before testing its 200-day moving average, with Celestica trading right at its 21-day.
Celestica stock trades at a 45% discount to the Zacks Tech sector at 14.6X forward 12-month earnings. Celestica's forward earnings multiple represents a 60% discount to its 10-year highs and not too much of a premium compared to its median, helping Celestica earn an "A" grade for Value in our Style Scores system.
Celestica also trades at 0.6X forward 12-month sales, roughly matching its industry's 0.5X, while offering staggering value compared to Tech's 6.3X.
Wrapping Up Celestica's Bull Case
Celestica is a $50-a-share tech stock trading 20% below its recent highs and 25% below its average Zacks price target despite blowing away the market and the Tech sector over the last few years.
The company's valuation is enticing and Celestica is poised to post booming earnings growth, supported by the rapid expansion of AI, data centers, and other vital growth areas of the U.S. economy that are floating above the broader economic slowdown.
Bear of the Day:
Bloomin' Brands, Inc. is the company behind Outback Steakhouse, Carrabba's Italian Grill, and other restaurant chains.
BLMN's earnings outlook has tanked since the start of 2023 as consumers pull back on spending. Bloomin' Brands posted another disappointing quarter in early August.
Bloomin' Brands Stock 101
Bloomin' Brands, Inc. BLMN is a casual dining restaurant giant, most famous for its Outback Steakhouse chain. The company also owns Carrabba's Italian Grill, Bonefish Grill, and Fleming's Prime Steakhouse & Wine Bar. Bloomin' Brands boasts that it owns and operates more than 1,450 restaurants across 46 states and 13 countries.
Bloomin' Brands is coming off a strong three-year stretch following its Covid tumble. Unfortunately, its sales have slowed since it posted 30% top-line expansion in 2021. The company grew its sales by 7% in 2022 and 6% last year. The company is projected to see its revenue slide 4% in 2024.
Bloomin' Brands missed our Q2 earnings per share estimate by 11% and provided downbeat guidance once again, with the casual dining industry "softer than anticipated." The causal dining space is suffering as consumer spending slows across the board as they start to wave the white flag amid lingering inflation.
Bloomin' Brands' third quarter EPS estimate has tumbled 49% in the last few months, with its FY24 and FY25 estimates roughly 15% lower, helping BLMN earn a Zacks Rank #5 (Strong Sell). The recent downward EPS revisions are part of a negative trend that began in early 2023.
Bloomin' Brands stock is down 3% in the past five years vs. its industry's 15% climb and the S&P 500's 95% surge. BLMN shares have tumbled 38% YTD.
Why Investors Might Want to Stay Away from Bloomin' Brands
Bloomin' Brands announced on Aug. 26 that Mike Spanos will take over as chief executive officer on September 3. Former CEO David Deno announced in early May his planned retirement.
It might be best to stay away from Bloomin' Brands until the company shows that a near-term bottom is in for this rough business cycle. Plus, its Retail – Restaurants industry is in the bottom 33% of over 250 Zacks industries.
Additional content:
Should You Start Accumulating Dell (DELL - Free Report) Shares After Q2 Results?
Dell Technologies Inc. reported impressive results for second-quarter fiscal of 2025, wherein both the top and the bottom line surpassed the Zacks Consensus Estimate. This was primarily driven by an 80% increase in server sales powered by artificial intelligence (AI) chips. The company also upwardly revised its full-year fiscal 2025 revenue guidance.
Dell Technologies currently carries a Zacks Rank #3 (Hold). This means that the stock price is expected to perform in line with the market in the near future. Investors should note that the magnitude and direction of estimate revisions could change following the company's just-released earnings report. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
DELL's Second-Quarter Earnings at a Glance
Dell Technologies reported quarterly adjusted earnings per share (EPS) of $1.89, beating the Zacks Consensus Estimate of $1.74. This compares to earnings of $1.74 per share a year ago. The company posted revenues of $25.03 billion, surpassing the Zacks Consensus Estimate by 3.03%. This compares to year-ago revenues of $22.93 billion.
DELL's Servers and Networking revenue came in at $7.76 billion, up 80% year over year and 82.3% sequentially. Within this, its AI-optimized servers sales rose about 23% sequentially to $3.2 billion in the second quarter.
The backlog for these AI servers was $3.8 billion at the end of the last reported quarter. DELL sells AI-optimized servers using GPUs of NVIDIA Corp.. It also uses the GPUs of Advanced Micro Devices Inc..
DELL has expanded its AI offerings in partnership with NVIDIA with "new server, edge, workstation, solutions and services advancements." On May 20, DELL announced the new Dell PowerEdge XE9680L server, which "offers direct liquid cooling and eight NVIDIA Blackwell Tensor Core GPUs for fast processing in a compact form factor."
DELL is benefiting from strong demand for AI servers driven by the ongoing digital transformation and heightened interest in generative AI applications. DELL's PowerEdge XE9680 AI-optimized server is in demand. Strong enterprise demand for AI-optimized servers is aiding DELL.
Earnings Estimates for DELL on the Rise
Dell Technologies upwardly revised for full fiscal 2025 revenues to the range of $95.5 - $98.5 billion from the previous range of $93.5 - $97.5 billion. Total revenue for fiscal 2024 was $88.4 billion. Management also forecast annual adjusted EPS of $7.80 (+/- $0.25). DELL projected revenues for the ensuing third-quarter in the range of $24 - $25 billion.
Dell Technologies has an expected revenue and earnings growth rate of 9.6% and 9.8%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for the current-quarter and current-year earnings has improved over the last 30 days.
Robust Price Upside for DELL Shares
Year to date, shares of Dell Technologies have jumped 49.1%. At the same time, the stock price has slumped nearly 34% since the company reported its fiscal first-quarter 2025 results. At present, the average stock price target of brokerage firms represents an increase of 38.3% from the last closing price of $110.74. The brokerage target stock price is currently in the range of $97-$186.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.