Stifel Raises Price Target on SYNNEX Corp. (SNX) to $104 Following 3Q Beat and Raise
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Stifel reiterated a Hold rating on SYNNEX Corp. (NYSE: SNX), and raised the price target to $104.00 (from $98.00), following the company's 3Q earnings report. SNX reported revenue and non-GAAP EPS of $3.67bn and $1.73, compared to consensus estimates of $3.49bn and $1.56. For the November quarter, the company guided revenue to $3.83bn-$3.93bn and non-GAAP EPS of $2.06-$2.11. this compares to the Street estimates of $3.77bn and $1.93.
Analyst Matthew Sheerin commented, "Synnex's August-quarter results of $3.67bn/$1.73 beat our high-on-the-Street estimates of $3.50bn/$1.59. Sales came in better than expected on strength from its Hyve Solution business, where it benefited from new customer additions, strength in services (Concentrix), as well as some market share gains. Nov-Q sales guidance of $3.88bn, aided by $113mn from the recent Minacs acquisition, was modestly ahead of our estimates and implies seasonal trends across most of its end markets. EPS guidance of roughly $2.09 at midpoint (vs. our estimate of $2.06) implies good leverage in the quarter; in addition to an incremental contribution from Minacs. Management down played the recent loss of its U.K-based contract, noting that the company does not expect to see any material impact going forward. We tweak our estimates to account for mix, and revise our FY17 EPS estimate to $7.39 (from $7.43). We also tweak up our price target to $104 (from $98), which is ~14x forward estimates. No doubt management deserves credit for good execution, but with shares trading at nearly 14x forward estimates, we maintain our Hold rating."
Shares of SYNNEX Corp. closed at $106.18 yesterday.
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