RBC Capital Markets on Thursday reiterated its outperform rating and US$160.00 price target on the shares of Celestica (CLS.TO) following the imposition of U.S. reciprocal tariffs.

RBC said new U.S. reciprocal tariffs will likely apply to products manufactured at several of Celestica's facilities, including Malaysia, China and Thailand.

According to RBC, Celestica's shares fell 10% in after-hours trading primarily due to the uncertain impact of tariffs on the broader economy and the pace of hyperscalers' data center investments.

RBC said tariffs are an industry issue, and its impact on Celestica remains uncertain. Management previously said it has capacity at its U.S. facilities, although it is unlikely that the company would be able to shift a meaningful amount of production to North America in the short-term.

RBC noted that semiconductors are exempt from this round of tariffs. It added that some hyperscalers and other large customers directly purchase semiconductors for Celestica to integrate into the end product on a consignment basis, which may lessen the impact of tariffs.

For products where Celestica purchases semiconductors, RBC said it is unknown if tariffs would apply to the end product or if there would be an adjustment for the semiconductor portion of the bill of materials.

"The longer that material tariffs remain in place, the greater the risk of a broad macroeconomic slowdown becomes, which, combined with the increased cost of data centers due to tariffs, may create headwinds for the pace of data center investments," RBC said.