02:18 PM EDT, 10/22/2024 (MT Newswires) -- In its third quarter preview of the Canadian tech sector, RBC Capital believes the best positioned stocks are Shopify ( SHOP ), Celestica ( CLS ), and Kinaxis ( KXSCF ).

Highlights:

Analyst Paul Treiber expects Celestica ( CLS ) (Outperform, US$65 target) to report solid third quarter results, with potential upside to consensus and guidance, driven by strong switching demand, given continued hyperscaler build-outs of data centers. Similar to the past two quarters, Celestica ( CLS ) may raise FY24 guidance, he adds. Moreover, Celestica ( CLS ) is likely to provide an updated outlook for FY25, which is expected to be in line with consensus.

Kinaxis ( KXSCF ) (Outperform, $200 target) is seeing sequentially stable growth may be sufficient to sustain sentiment ahead of a new CEO announcement, notes Treiber. Kinaxis' ( KXSCF ) third quarter is expected to be largely in line with consensus, as the company reiterated FY24 guidance on August 27. The appointment of a new sales-oriented CEO before the end of 2024 will likely be a catalyst for the stock.

Shopify ( SHOP ) (Outperform, US$100 target) is expected to report third quarter revenue slightly ahead of consensus on stronger MRR and GMV growth, which is supported by several data sources suggesting healthy consumer spending and sustained market share gains, writes Treiber. He believes Q3 adj. EBITDA margins and Q4 margin guidance may surprise to the upside on operating leverage and opex discipline. Healthy growth and margin expansion are likely to sustain the rally in the stock.

Price: 77.87, Change: -0.50, Percent Change: -0.64