In a report released yesterday, Lee Simpson from Morgan Stanley maintained a Buy rating on Synopsys, with a price target of $540.00.
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Lee Simpson’s rating is based on the recent approval by China’s State Administration for Market Regulation (SAMR) of Synopsys’ significant $35 billion acquisition of Ansys. This regulatory clearance is seen as a crucial step forward, removing a major obstacle and paving the way for the deal’s completion. The merger is anticipated to enhance Synopsys’ standing in the electronic design automation (EDA) market over the long term, positioning the company for greater success.
Moreover, the conditions imposed by SAMR, such as maintaining existing contracts with Chinese clients and ensuring interoperability, align with global regulatory standards and industry practices. These conditions are not expected to hinder the merger’s benefits but rather ensure continued access to tools and services for Chinese customers. The anticipated closure of the deal, with an update likely at the upcoming results, is expected to positively impact Synopsys’ stock, justifying the Buy rating.
According to TipRanks, Simpson is a 3-star analyst with an average return of 5.9% and a 63.24% success rate. Simpson covers the Technology sector, focusing on stocks such as Synopsys, ASML Holding NV, and Cadence Design.
In another report released today, Needham also reiterated a Buy rating on the stock with a $660.00 price target.