Goldman Sachs Reiterates Buy Rating on Keysight Technologies (KEYS)
Goldman Sachs analyst Mark Delaney reiterated a Buy rating and $181.00 price target on Keysight Technologies (NYSE: KEYS).
The analyst comments "Keysight reported 3QFY24 revenue/non-GAAP EPS of $1.22 bn/$1.57, 2%/$0.22 above the Street (FactSet). Excluding the impact of tax-rate benefits, non-GAAP EPS would have been $1.41. Orders in the quarter were $1,249 mn (up 0.4% yoy and up 2% qoq), and BTB was 1.03. KEYS guided 4QFY24 revenue and EPS to ~$1.26 bn/$1.56 at the midpoint, about in line/$0.02 above the Street. We estimate the 4QFY24 EPS guide benefited by ~$0.05 from a lower tax rate. We maintain our Buy rating on the stock. We are encouraged by the growth in orders (up 0.4% yoy and 2% qoq) and second consecutive quarter of BTB being above 1, especially after 6 consecutive quarters of yoy order declines prior. Historical downturns typically lasted about 4-6 quarters. While there continues to be some areas of weakness (e.g. wireless orders were stable sequentially but lower yoy, and EV demand was down), we see opportunities for Keysight over the intermediate to longer term in areas such as 6G, AI, EV/AVs. Finally, software and services mix continues to remain strong at nearly 40% of revenues."
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Shares of Keysight Technologies closed at $138.57 yesterday.