BofA Raises Keysight Technologies Price Target to $179, Maintains Neutral Rating

BofA raised Keysight Technologies' price target to $179 from $175 and maintained a Neutral rating after management raised FY25 revenue and adjusted EPS growth guidance despite Q4 tariff costs. The firm raised its FY25 adjusted EPS forecast to $7.09, driven by 3c upside in Q3, and kept its FY26 adjusted EPS view at $7.95.

Bank of America (BofA) has increased its price target for Keysight Technologies (KEYS) to $179 from $175, maintaining a Neutral rating after the company's management raised its full-year 2025 (FY25) revenue and adjusted EPS growth guidance. Despite the impact of Q4 tariff costs, Keysight reported a strong Q3 2025 performance, which has led BofA to revise its outlook.

In its Q3 2025 earnings report, Keysight reported revenue of $1.35 billion, an 11% year-over-year increase, and non-GAAP EPS of $1.72, beating expectations by 2.99%. The Communications Solutions Group (CSG) and the Electronic Industrial Solutions Group (EISG) both grew by 11%, driven by robust demand in the semiconductor, automotive, and aerospace sectors. BofA has raised its FY25 adjusted EPS forecast to $7.09, reflecting a 3 cent upside in Q3, and kept its FY26 adjusted EPS view at $7.95 [3].

Despite the strong Q3 performance, Keysight's stock experienced short-term market volatility, declining by 0.58% post-earnings. The company's 28x price-to-earnings (P/E) ratio, compared to its 5-year average of 32x, and its $3.4 billion cash position, support BofA's Neutral rating for the 12-18 month horizon.

Keysight's strong Q3 results and management's guidance indicate a resilient business model, with diversified growth engines in AI infrastructure and defense spending. The company's ability to navigate macroeconomic headwinds and maintain pricing power is evident in its 25% operating margin and robust cash flow generation. However, the recent tariff costs may impact the company's profitability in the near term.

BofA's revised target and Neutral rating reflect a balanced view of Keysight's performance and future prospects. While the company's earnings momentum is strong, the impact of tariff costs and short-term market volatility warrant caution. Investors should closely monitor Keysight's earnings reports and management's guidance to assess the company's ability to sustain its growth trajectory.

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/KEYS/pressreleases/34296761/wall-street-analysts-are-bullish-on-top-technology-picks/
[2] https://www.ainvest.com/news/keysight-technologies-keys-high-conviction-buy-ai-growth-tailwinds-2508/
[3] https://www.ainvest.com/news/keysight-technologies-keys-outperforms-estimates-earnings-momentum-sustain-buy-opportunity-2508/