Morgan Stanley analyst Lee Simpson maintained a Buy rating on Synopsys (SNPS – Research Report) today and set a price target of $590.00.
Lee Simpson’s rating is based on Synopsys’s strategic positioning and expected future growth, despite the anticipated slow sales growth in FY25. The company has been increasingly relying on upfront sales, and this trend is expected to continue, particularly with products related to synopsys.ai and IP, which could drive future momentum. Furthermore, the anticipated margin leverage of approximately 150 basis points in FY25 indicates ongoing efficiency gains and cost management, which are positive indicators for profitability.
Another critical factor in Simpson’s Buy rating is the expected closure of the Ansys deal by the end of the first half of 2025, which could provide significant strategic advantages in the longer term. The narrowing of the discount to the deal price suggests the market’s confidence in this deal being finalized, potentially further enhancing Synopsys’s market position. Despite some macroeconomic uncertainties and challenges in China, the company’s strategic initiatives and market movements support a positive long-term outlook.
According to TipRanks, Simpson is a 2-star analyst with an average return of 1.0% and a 46.67% success rate. Simpson covers the Technology sector, focusing on stocks such as Synopsys, Cadence Design, and ARM Holdings PLC ADR.
In another report released on February 11, Needham also maintained a Buy rating on the stock with a $650.00 price target.