Wells Fargo analyst Gary Mobley maintains Synopsys Inc (NASDAQ: SNPS) with an Overweight and lowered the price target from $425 to $400.
Ahead of Synopsys' October quarter EPS print, he re-rated the stock.
He slashed his price target to be more in line with their peers.
He believes SNPS should command a similar (or slight premium) valuation to peers as the company's forward-three-year EPS CAGR of ~15% is at or slightly above peers.
He believes Synopsys will post a beat-and-raise quarter and guide.
While there is some investor concern about Synopsys' China exposure and exposure to the semi-cycle, he still thinks it is an excellent time to be an EDA company, with multiple secular tailwinds driving growth.
The tailwinds included fragmentation of the chip design industry and chip design teams taking more significant deals.
Price Action: SNPS shares traded lower by 0.37% at $323.62 on the last check Tuesday.
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