UPDATE: Stifel Starts Synopsys (SNPS) at Buy

Stifel analyst Ruben Roy initiates coverage on Synopsys (NASDAQ: SNPS) with a Buy rating and a price target of $445.00.

The analyst comments "We rate Synopsys, Inc. a Buy with a $445 target price. In addition to core EDA tools and services, which account for 91% of the Company's overall revenue, Synopsys began to diversify into the Software Integrity markets beginning in 2014. We view this strategy as a strong differentiator for the company as Synopsys has rapidly assembled the broadest portfolio of security and quality technology in the marketplace and now has more than 4,000 customers. SNPS believes that its software solutions serve a $2 billion - $2.5 billion market and should grow at a faster than market pace (multi-year growth forecast in the 15% to 20% range versus market growth expectations in the mid-teens. As the Software Integrity business scales, we believe that Synopsys' margin structure will improve meaningfully. Currently trading at 33x our C2023 EPS estimate of $10.57, we view shares as attractively valued, particularly against competitor Cadence but also against high-quality technical software peers. Our $445 target price is based on a 42x multiple on our C2023 EPS estimate."

For an analyst ratings summary and ratings history on Synopsys click here. For more ratings news on Synopsys click here.

Shares of Synopsys closed at $326.83 yesterday.

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