KeyBanc Capital raised its price target for Synopsys (NASDAQ:SNPS) to $600 from $540 per share in a note Monday, maintaining an Overweight rating on the stock ahead of its earnings release on November 29.
Analysts said the firm expects to the software company to post a beat and raise.
"Heading into Synopsys's F4Q earnings, we see potential for a modest $5M revenue beat (consistent with prior quarterly beats), driven by continued strength in IP and hardware," the analysts stated.
"Backlog will be an important metric to watch, which we expect to come in flat again ($7,100M), but would view anything above that as a positive. More importantly, we would look for Synopsys to guide FY24 conservatively with an initial revenue growth outlook of 12-13% and raise the outlook throughout the year," they added.
The Wall Street firm also reiterated its long-term bullish conviction and confidence in SNPS and the EDA sector as a whole. However, while they are positive, they stated that "a more conservative stance into earnings is appropriate."