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 has given his Buy rating due to a combination of factors that highlight Synopsys’s robust performance and strategic positioning. Despite the slowing growth in China, Synopsys has demonstrated strength in other areas, particularly in its hardware segment, which has helped maintain its guidance for FY25. The company’s recent performance exceeded expectations, with solid Q1 sales and earnings, and an in-line Q2 guide, which halted the trend of weaker-than-expected guidance in its core EDA business.
Furthermore, the company’s refreshed hardware portfolio, including HASP and ZeBu, has driven improved hardware demand, contributing to the company’s positive outlook. Synopsys’s valuation reflects a premium to the broader semiconductor sector, justified by its software-centric business model and exposure to growth areas like AI-enabled tools and digital chip innovation. The anticipated closure of the Ansys deal and progress with the Chinese regulator further bolster confidence in the company’s future prospects.
According to TipRanks, Simpson is a 2-star analyst with an average return of 0.5% and a 44.26% success rate. Simpson covers the Technology sector, focusing on stocks such as Synopsys, Cadence Design, and ARM Holdings PLC ADR.
In another report released yesterday, Bank of America Securities also reiterated a Buy rating on the stock with a $630.00 price target.
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