Q: How exposed are SHOP and CLS to US tariffs? In the case of SHOP, what proportion of transactions are cross-border? For CLS, where are its manufacturing plants located. Overall, how do you view their perspectives today versus what they were pre-liberation day? Thanks.
5i Research Answer:
Please see this answer for a discussion on tariffs and SHOP. Comments still apply, except that tariffs imposed are much worse than previously thought, and the stock is now down 24% YTD. SHOP does not release all data but it is estimated 1/3rd of business is cross-border. But note shipping to an individual customer is different than a tariff on a manufacturer. Here is a list of Celestica plants. We think both will be ultimately quite fine, over time. Their stocks should do very well when this trade war ends, and we are becoming more and more convinced that it will end at some point. Trump may dig in his heels for some time, but economic pressure will likely result in concessions at some stage.