Keysight Is S&P 500’s Leading Decliner. Blame Guidance.

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Keysight stock was on track to close at the lowest level since June 16, 2022.

Courtesy Keysight

Keysight Technologies

stock was the leading decliner in the

S&P 500

after the test equipment manufacturer issued weak financial forecasts, prompting analysts to lower their targets for the stock price. Shares of Keysight (ticker: KEYS) fell 12% to $132.09. If the stock ended the day at that level, it would be its lowest close since June 16, 2022, when it closed at $131.05, according to Dow Jones Market Data.

Citi analysts maintained their Buy rating but slashed their price target to $174 from $200 in a Thursday report. They cited a solid quarterly result and disappointing guidance “as inventory digestion and weakness in China weigh on the business.” “While margin expansion and sequentially improving 4Q orders were bright spots, the lack of a near term catalyst for the next 6 months will be an overhang.” they said.

Wells Fargo

analysts also weighed in, maintaining an Overweight rating but cutting their price target to $175 from $200 and lowering their forecasts for revenue and earnings per share in a Thursday report. “While difficult to refute the near-term share pressure, we think the key tenets of our long-term thesis on KEYS remain intact,” they wrote. On Thursday, Keysight said that in its fourth fiscal quarter, it expects adjusted earnings of $1.83 to $1.89 a share and revenue of between $1.29 billion and $1.31 billion. Analysts surveyed by FactSet had penciled in earnings of $2 a share and revenue of $1.39 billion. For the full fiscal year, the company forecast earnings and revenue will fall in ranges with midpoints of $8.19 a share and $5.45 billion, respectively. Analysts were expecting earnings of $8.16 a share and revenue of $5.55 billion. For its third quarter, the company posted revenue of $1.38 billion and adjusted earnings of $2.19 a share. Both numbers were higher than expected. “Despite near-term macro challenges, Keysight’s diversified business, strong customer engagement through our differentiated solutions portfolio, and durable operating model give us confidence in our ability to capitalize on the long-term secular growth trends of our markets, as well as outperform in a variety of market conditions,” said CEO Satish Dhanasekaran in the earnings release. Write to Emily Dattilo at [email protected]

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