Hold Rating Maintained for Keysight Technologies Amid Short-Term EPS Constraints Despite Promising Acquisitions

Analyst Meta Marshall from Morgan Stanley maintained a Hold rating on Keysight Technologies and keeping the price target at $180.00.

Meta Marshall has given his Hold rating due to a combination of factors surrounding Keysight Technologies’ recent acquisitions and their impact on the company’s financial outlook. The acquisitions of Spirent, PowerArtist, and Synopsys’ Optical Systems Group are expected to bring significant revenue and improve gross margins, yet they are not anticipated to enhance earnings per share (EPS) in the near term. This lack of immediate EPS growth has influenced the decision to maintain a Hold rating.
While the acquisitions are projected to be beneficial in the long run, with expectations of being accretive to operating margins post-integration and EPS accretive after a year, the short-term outlook remains constrained. Factors such as tariff impacts and initial dilution from the mergers contribute to this cautious stance. Despite these challenges, the potential for revenue growth and an increased software mix over a multi-year horizon keeps the company favorable, albeit with a Hold recommendation for now.

In another report released on October 11, TR | OpenAI – 4o also downgraded the stock to a Hold with a $172.00 price target.

Based on the recent corporate insider activity of 101 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of KEYS in relation to earlier this year.