We lower our rating to Hold from Buy and our target to $160 from $163 based on: 1) FY 1Q 20 (Oct.) results that were ahead of expectations but clearly reflect the ongoing negative impact of China-related export restrictions, macro-economic uncertainty, and apparent execution issues in SNPS's faster growing software integrity segment (10% of total revenue); 2) cautious guidance for full-year FY 20; 3) stretched valuation, noting the stock's 47% rise since 2.21.19; and, 4) our fundamental thesis of revenue growth acceleration remaining intact but likely delayed by several quarters. Our new $160 target is a product of our now lower FY 21 EPS forecast of $6.21 (vs. $6.27) and a 25.8x multiple (trailing 2-year average). Revenue of $834m beat consensus by $13m but was up only 2% YoY; EPS of $1.01 beat consensus by $0.09 but was down from $1.08 in FY 1Q 19. We lower our FY 20 EPS estimate to $5.27 (from $5.32), our FY 21 forecast to $6.21 from ($6.27) and FY 22 to $7.09 from $7.16.
|Analyst Actions: B. Riley Upgrades CNO Financial Gro...|
|Sector Update: Energy Firms Trade Lower Premarket Fr...|
|Sector Update: Financial Stocks Decline Premarket Fr...|
|Tesla CEO Musk Earns About $770 Million in Milestone...|
|Sector Update: Health Care Stocks Climb Pre-Bell Friday|