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Research Alert: CFRA Maintains Buy Rating On Shares Of Synopsys, Inc.

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raise our price target by $29 to $550, 31x our FY 27 (Oct.) EPS estimate, just below SNPS's three-year average (~33x) given recent Design IP weakness. We increase our FY 26 EPS view by $0.37 to $14.84 and lift FY 27's by $0.10 to $17.75. Shares are down 9% as SNPS's moderate beat-and-raise failed to impress investors, with AI strength still not driving significant growth given weak design starts across non-AI areas. Still, we are encouraged that management sees Q1 as the trough for Design IP (20% of Q2 sales), with Q/Q growth expected throughout FY 27 and traction growing with hyperscalers. Joint Ansys products and agentic AI monetization both live more in FY 27, but early results have been positive. Management noted "confidence is higher" in achieving its revenue synergy targets, with 20 customers now experimenting with 25+ specialized design agents. Design Automation sales continue to search for direction, growing 9% (ex-Ansys) in Q2 FY 26 vs. +12% in Q1 and +6% in Q2 FY 25.

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