TD Synnex (SNX) PT Lowered to $120 at Stifel

Stifel analyst Matthew Sheerin lowered the price target on TD Synnex (NYSE: SNX) to $120.00 (from $125.00) while maintaining a Buy rating following earnings.

The analyst commented, "TD Synnex’s Aug-Q sales of $15.36bn beat our estimate by ~$350mn, up 7% y/y pro forma for the Tech Data acquisition, or up 15% ex-FX and merger-related rev-rec changes, while EPS of $2.74 beat our estimate by 3 cents. The topline beat was driven by still good demand in data center, hybrid cloud, security and commercial PCs (on improved supply). SNX's backlog for client devices is declining, but has increased again for advanced solutions (networking, storage, servers). The company guided Nov. Q sales modestly below Consensus, due in part to incremental FX headwinds ($700mn y/y) and higher interest expense. Meanwhile, the integration of Tech Data is ahead of schedule, with $140mn of the targeted $200mn in synergies already realized. In addition, management is targeting FY23 FCF of $1bn (a ~12% yield). We maintain our Buy rating but lower our PT to $120, or 10x forward earnings."

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