Mitch Steves has revealed his bullish expectations for the big day.” data-reactid=”12″>Silicon chipmaker Synopsys is gearing up to report its July quarter earning results on August 19 after the market closes. Going into the print, five-star RBC Capital analyst Mitch Steves has revealed his bullish expectations for the big day.
SNPS) and would be owners into earnings on a likely beat and raise from the company” the analyst told investors on August 17. “While Software Integrity is a question mark given that we haven’t seen performance in a volatile macro climate, we are confident in the remaining ~90% of the business seeing upside” he wrote.” data-reactid=”13″>“We remain positive on Synopsys (SNPS) and would be owners into earnings on a likely beat and raise from the company” the analyst told investors on August 17. “While Software Integrity is a question mark given that we haven’t seen performance in a volatile macro climate, we are confident in the remaining ~90% of the business seeing upside” he wrote.
See SNPS stock analysis on TipRanks).” data-reactid=”14″>Indeed, Steves has a buy rating on the stock and $210 price target, indicating 10% upside potential from current levels. That’s with shares already up an impressive 41% year-to-date. (See SNPS stock analysis on TipRanks).
According to the RBC analyst, Software Integrity may be weaker than the core EDA (electronic design automation) business, but says that the results for 2H will likely be solid given the continued push to 5nm and 3nm designs, which drive selling prices significantly higher.
In addition, the analyst notes that he has received questions related to Intel headwinds and views them as unfounded given “1) the company likely won’t cut R&D spending and 2) even if CPU server demand declines at Intel, it should increase at AMD who would likely increase its R&D budget to remain ahead.”
As a result the analyst thinks the Street’s revenue/EPS expectations for $3.6B/$5.27 for FY20E could rise a few percentage points post earnings. He is also modeling for R&D spend to grow +5% y/y to $36.0B and to $37.6B in 2021, +4% y/y.
price target now indicates 1% downside potential from current levels.” data-reactid=”22″>And the rest of the Street shares Steves’ optimistic outlook. With 11 back-to-back buy ratings over the last three months, SNPS scores a firm Strong Buy analyst consensus. However due to the recent rally the $194 average analyst price target now indicates 1% downside potential from current levels.
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