Shares of Keysight Technologies (ticker: KEYS) took a hit in the S&P 500 as the test equipment manufacturer released underwhelming financial forecasts. This resulted in analysts revising their target prices for the stock.
The stock price of Keysight plummeted by 12% to reach $132.09. If it ends the day at this level, it would mark its lowest closing price since June 16, 2022, when it concluded at $131.05, based on data from Dow Jones Market Data.
Citi analysts maintained their Buy rating but decreased their price target to $174 from $200 in a recent report. They attributed this adjustment to a solid quarterly performance and disappointing guidance, stating that "inventory digestion and weakness in China weigh on the business." However, they highlighted positive aspects such as margin expansion and an improvement in 4Q orders, while expressing concerns about the lack of a near-term catalyst for the next six months.
Similarly, Wells Fargo analysts affirmed their Overweight rating while revising down their price target to $175 from $200 in their report. They acknowledged the short-term pressure on shares but asserted that the fundamental aspects of their long-term thesis on KEYS remain intact. Furthermore, they adjusted their revenue and earnings per share forecasts accordingly.
Although the weak financial forecasts have impacted Keysight Technologies' stock, several analysts still maintain a positive outlook on the company's long-term growth potential.
Keysight Expects Strong Fourth Quarter Results
Keysight Technologies, a leading technology company, has announced its expectations for the fourth fiscal quarter. The company predicts adjusted earnings of $1.83 to $1.89 per share and revenue between $1.29 billion and $1.31 billion.
Analysts had previously estimated earnings of $2 per share and revenue of $1.39 billion, indicating that Keysight's projections are slightly lower than anticipated.
Looking at the full fiscal year, Keysight forecasts earnings and revenue to fall within ranges with midpoints of $8.19 per share and $5.45 billion, respectively. This is a close match to analysts' expectations of earnings at $8.16 per share and revenue at $5.55 billion.
Keysight's strong performance in the third quarter also exceeded expectations, with revenue reaching $1.38 billion and adjusted earnings at $2.19 per share.
The company's CEO, Satish Dhanasekaran, remains confident despite macro challenges in the current market. Dhanasekaran believes in Keysight's potential for long-term growth due to its diverse business, strong customer engagement, and a robust operating model.
In conclusion, Keysight Technologies is well-positioned to thrive in various market conditions and continues to capitalize on the growing trends in its markets.