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Investing.com - KeyBanc raised its price target on Synopsys (NASDAQ:SNPS) to $660 from $610 on Wednesday, maintaining an Overweight rating on the stock ahead of the company’s fiscal third-quarter earnings report. The stock, currently trading at $592, appears overvalued according to InvestingPro analysis, despite its impressive gross profit margins of 81.4% and strong financial health score.
Synopsys will report its third-quarter results on September 9 after market close, marking the first quarter that will include combined financials with the recently closed Ansys acquisition. With analysts forecasting EPS of $13.15 for FY2025 and the company maintaining a robust current ratio of 7.02, InvestingPro subscribers can access 14 additional key insights about Synopsys’s financial outlook.
KeyBanc expects the Ansys deal to contribute more than $100 million in the fiscal third quarter and over $750 million for the full fiscal year 2025.
The investment firm also anticipates modest upside to Synopsys’ standalone financial figures for both the third quarter and full fiscal year 2025.
KeyBanc’s price target increase reflects its optimism about Synopsys’ ability to execute as a unified entity following the acquisition, with the firm also providing an early look at potential combined financial performance for fiscal year 2026.
In other recent news, Synopsys has completed its acquisition of Ansys, creating a combined entity that enhances its engineering solutions capabilities. This merger positions the company to compete in an expanded $31 billion market, integrating Synopsys’ silicon design expertise with Ansys’ simulation and analysis strengths. Following the acquisition, Piper Sandler raised its price target for Synopsys to $660, maintaining an Overweight rating, while Needham also increased its target to $660, citing China’s conditional approval of the deal. Goldman Sachs reiterated a Buy rating on Synopsys with a price target of $700, although it cautioned about potential volatility related to the Ansys integration. These developments reflect a positive outlook from analysts despite concerns over China EDA export controls. The merger is expected to generate a $10 billion run-rate, reinforcing Synopsys’ leadership across silicon design, systems engineering, and complex simulation software. Additionally, The Trade Desk will join the S&P 500 index, replacing Ansys as a result of the acquisition by Synopsys.
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