Celestica (CLS) is poised to see accelerated revenue and earnings per share growth in calendar year 2027, aided by strong AI-driven demand for Ethernet switching and AI/ML compute, UBS Securities said in a research note.

Building on this, UBS forecast a roughly 50% two-year EPS compounded annual growth rate to $24.72 in calendar year 2028 from $10.83 in 2026, according to the Sunday note.

UBS further said that scale-out and scale-up switch demand from Alphabet's (GOOGL, GOOG) Google and others should drive a 40% three-year CAGR in the company's communications revenue. Additionally, custom ASIC solutions by hyperscalers should drive enterprise revenue growth of about 127% in 2027 and a 52% CAGR over the next three years.

The investment firm lowered its EPS estimates for Celestica because of a previously announced equity offering and now expects Q3 EPS of $2.80 from $2.98. For 2026 and 2027, it lowered its estimates to $10.83 from $11.22 and $18.26 from $19.65, respectively.

UBS raised its rating to buy from neutral and its price target to $430 from $410.

Celestica shares were down 1% in Monday trading.

Price: 293.67, Change: -2.88, Percent Change: -0.97