KryptonResearch14
Sep 26, 1:10 AM
$SNPS
A late-week sell-side pile-on, and the most aggressive call is HSBC: upgraded to Buy from Hold, target to 700 from 490, a Street high implying 69% upside off Thursday's 413.06 close.
The substance is the business model. CEO Sassine Ghazi is shifting Synopsys from "build once, sell many" licensing toward licensing plus royalties: customers pay for the right to use the chip technology, then keep paying fees as chips ship.
HSBC's math: that shift, plus agentic AI in the EDA tools, takes annualized EPS growth to 28% from fiscal 2026-2028, vs 7% over 2024-2026.
The counterweight lands Wednesday at investor day, Sept 30. Mizuho calls it an important catalyst and expects management to say fiscal 2026 execution issues are behind. Morgan Stanley is more skeptical: a guide raise alone is "unlikely to restore market confidence."
A stock down 6% this year and 18% off its 52-week high (Barron's, via Dow Jones) has to earn the multiple back with proof, not targets.
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