Susquehanna lifted Keysight Technologies’ price target to $132 (37.7% upside potential) from $130 and reiterated a Buy rating on the stock as the electronic design and test solutions provider is poised to benefit from 5G deployments.
Susquehanna analyst Mehdi Hosseini wrote in a note to investors on Aug. 21 that Keysight Technologies (KEYS) is likely to “benefit from continued 5G/400G roll out in APAC and US despite weaker EU.” Hosseini said that “We are increasing our FWD PE valuation multiple from 21x to 22x to account for the increased sustainability of the 5G and higher speed Networking investment cycle, all while the more GDP driven sub-segments appear to have bottomed and are poised for a rebound in the next 12-18 months.”
On Aug. 20, Keysight reported stronger-than-expected 3Q results and provided an upbeat outlook for 4Q. The company’s 3Q revenues of $1.01 billion beat Street estimates of $915.4 million. Its adjusted EPS of $1.19 also surpassed analysts’ expectations of $0.83. (See KEYS stock analysis on TipRanks).
The company’s 4Q adjusted EPS guidance range of $1.42-$1.48 is higher than analysts’ forecast of $1.24. Revenue is expected to come between $1.17 billion and $1.19 billion, which is above the Street consensus of $1.11 billion.
Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 9 Buys and 1 Hold. With shares currently down 6.6% year-to-date, the average price target of $125.67 now implies upside potential of about 31.1%, .
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