TD Synnex (SNX) PT Lowered to $138 at UBS
UBS analyst David Vogt lowered the price target on TD Synnex (NYSE: SNX) to $138.00 (from $150.00) while maintaining a Buy rating.
The analyst commented, "TD SYNNEX reported a solid quarter in the face of a host of macro challenges including the ongoing threat of tariffs as gross billings were up 8% YoY despite component shortages at Hyve's largest partner as the core disty business posted strong results. While normally a modest rev outlook shortfall would be met with modest selling, the shares declined mid-teens post earnings given the disclosure that Hyve demand is coming in a bit softer than previously expected over the next several quarters at a Cloud customer that started ramping last year. The company framed the slowdown as a realignment of its demand forecast and expects it to be resolved in a few quarters while noting an industry GPU transition was not a factor. As such, the key debate in our view centers around share, competition, and timing around a recovery. Based on our investor conversations, there is a degree of concern that share loss to an ODM/EMS company like Jabil at a hyperscaler is a potential issue while the concern that moderating spend at Microsoft would also be a headwind. While visibility is limited, in either case, we believe it's prudent to be more conservative in forecasting a recovery in Hyve the rest of FY25 resulting in estimate revisions. That said, given SNX shares were trading less than 10x NTM cons EPS (pre-earnings), we believe the market had already priced in slower growth and EPS below cons mitigating some of the disappointment in our view. Therefore, while uncertainty remains, we believe the results could be a 'clearing event' but acknowledge a near-term catalyst is not readily evident."