On Friday, Deutsche Bank (ETR:DBKGn) increased its price target for Keysight Technologies (NYSE:KEYS), a leading technology company, from $163.00 to $175.00, while maintaining a Buy rating on the stock. The adjustment reflects a positive outlook on the company's future performance.
Deutsche Bank's assessment is based on the company's recent quarterly communications, which the firm views as a positive step forward. The bank anticipates that Keysight Technologies' orders in the second half of the fiscal year will surpass those in the first half. Additionally, a more gradual recovery is expected as the company heads into the next year.
The new 12-month price target of $175.00 suggests a 13% potential increase from the stock's current trading level. This target is set at approximately 21 times the projected earnings per share (EPS) for the calendar year 2026. Deutsche Bank's rationale for the price target is grounded in the company's potential to sustain a mid-teens compound annual growth rate (CAGR) in EPS through the fiscal year 2025 and beyond.
Deutsche Bank justifies the premium price target for Keysight Technologies compared to the market multiple. This premium is based on the firm's confidence in Keysight's ability to deliver consistent earnings growth over the coming years.
In other recent news, Keysight Technologies has been making significant strides in the tech industry. The company recently reported a robust Q3 performance, with revenues of $1.2 billion and an earnings per share (EPS) of $1.57, surpassing expectations.
Analysts from Baird, Goldman Sachs (NYSE:GS), Susquehanna, and BofA Securities have provided varying perspectives on the company's performance and future trajectory, with Baird increasing its price target for Keysight from $160 to $163, while Goldman Sachs maintained a steady price target of $181.
Susquehanna, on the other hand, lowered its price target to $185 from $195, while BofA Securities raised its price target from $135 to $150. These adjustments reflect different interpretations of Keysight's recent performance and future prospects.
Keysight's Q3 performance was bolstered by increased demand in the Commercial Communications sector, particularly related to artificial intelligence and data centers. The company also announced plans to expand its serviceable available market and pursue mergers and acquisitions, with the Spirent (LON:SPT) acquisition expected to close in the first half of fiscal year 2025.
In addition to these strategic moves, Keysight repurchased 1.07 million shares for $150 million, ending the quarter with a strong cash position of $1.6 billion. These recent developments reflect Keysight's strategic positioning in the competitive technology market and its commitment to delivering value to its investors.
InvestingPro Insights
Keysight Technologies (NYSE:KEYS) has recently garnered attention with a revised price target from Deutsche Bank, and additional insights from InvestingPro could provide a deeper understanding of the company's financial health and market position. According to InvestingPro, four analysts have revised their earnings upwards for the upcoming period, indicating a potential positive shift in the company's performance. This aligns with Deutsche Bank's optimistic outlook and may further support the case for a higher price target.
InvestingPro data shows Keysight Technologies with a market capitalization of $26.95 billion and a robust gross profit margin of 63.46% over the last twelve months as of Q3 2024. While analysts anticipate a sales decline in the current year, the company has demonstrated a significant return over the last week, with a 14.29% price total return, and maintains a high return over the last decade. These metrics underscore the company's ability to generate substantial profits despite revenue fluctuations.
Moreover, Keysight Technologies is trading near its 52-week high, at 95.35% of the peak, reflecting strong investor confidence and market performance. With the company's next earnings date on November 18, 2024, investors will be watching to see if the positive trends continue. It's also noteworthy that the InvestingPro Fair Value estimate stands at $138.00, which provides a grounded perspective alongside analyst targets.
For those interested in a deeper analysis, InvestingPro offers additional tips on Keysight Technologies, which can be accessed at Investing.com/pro/KEYS.
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