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On Monday, BofA Securities updated its outlook on TD Synnex (NYSE:SNX) shares, reducing the price target to $135 from $150, while reaffirming a Buy rating on the stock. The adjustment follows TD Synnex’s reported first-quarter billings growth for fiscal year 2025, which showed a year-over-year increase of 7.5%, or 9.5% on a constant currency (CC) basis. The stock, currently trading at $103.67, has experienced a significant 19.6% decline over the past week, pushing it near its 52-week low. According to InvestingPro analysis, TD Synnex appears undervalued, with 14 additional exclusive insights available to subscribers.
TD Synnex’s Advanced Solutions and Endpoint Solutions segments experienced growth of 7% and 8% year-over-year, respectively. The company’s Endpoint Solutions performance was particularly bolstered by sales in PCs and mobile devices. According to BofA Securities, there has been no significant change in customer purchasing behavior in anticipation of proposed new tariffs, and while some vendors have increased prices, these hikes have been relatively modest. With annual revenue reaching $59 billion and a gross profit margin of 6.7%, TD Synnex maintains its position as a prominent player in the Electronic Equipment industry.
The report also highlighted that the printing market remains difficult, but TD Synnex’s Advanced Solutions saw growth driven by software, servers, storage, and its Hyve manufacturing business. Although Hyve’s growth was robust, it fell short of expectations. The strategic technology portfolio of TD Synnex, which includes security, cloud, and data analytics, grew over 20% year-over-year.
TD Synnex continues to prioritize profitable growth and free cash flow (FCF). The company is scheduled to host its Investor Day on April 10, where further details about its strategy, medium-term targets, and capital allocation framework are anticipated.
BofA Securities reaffirmed its positive stance on TD Synnex, citing the company’s long-term shift towards higher-margin products and services, its broad portfolio, and the potential for cross-selling opportunities. Trading at a P/E ratio of 12.9, the stock offers compelling value relative to its growth prospects. For deeper insights into TD Synnex’s valuation and growth potential, including exclusive ProTips and comprehensive analysis, visit InvestingPro, where you’ll find detailed research reports covering 1,400+ top US stocks.
In other recent news, TD Synnex has reported its Q2 2025 earnings, which revealed a shortfall in both earnings per share (EPS) and revenue. The company posted an EPS of $2.80, falling short of the $2.91 forecast, and reported revenue at $14.53 billion, compared to the anticipated $14.79 billion. This earnings miss follows a first-quarter report where TD Synnex also fell short of expectations, leading to a significant drop in its stock price. Despite these challenges, the company maintains a mid-single-digit growth expectation and projects EPS growth in the coming quarters.
RBC Capital Markets continues to support TD Synnex with an Outperform rating, highlighting the company’s ability to outperform the IT distribution market and projecting improvements in its Hyve segment. In contrast, Barclays (LON:BARC) has reduced its price target for TD Synnex from $148 to $125, maintaining an Equalweight rating due to uncertainties in IT spending recovery. Meanwhile, Raymond (NSE:RYMD) James adjusted its price target to $125 but retained a Strong Buy rating, citing robust gross billings growth despite revenue and EPS misses.
TD Synnex’s Hyve segment has faced temporary setbacks, affecting cash flow due to inefficiencies in the hyperscaler assembly business. The company remains optimistic about a recovery in demand and future growth, with expectations of increased share repurchases as the stock price approaches book value. These developments are part of a broader context of ongoing challenges and strategic initiatives that TD Synnex is navigating in the current market environment.
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