It’s time to buy Keysight Technologies , Citi said, citing a “rare pull back opportunity” for investors despite the company’s weaker near-term outlook. Analyst Jim Suva reiterated the firm’s buy rating on Keysight and its price target of $225 per share, which suggests an upside of nearly 23% from Tuesday’s close. “We have seen this before, a high quality highly profitable company that investors have for a long time asked for teach-ins and are awaiting a stock pull back that is not driven by share losses. This is the opportunity,” Suva wrote in a note to clients on Wednesday. Shares of the electronics test and measurement manufacturing company are down more than 13% in trading Wednesday after posting a weaker-than-expected outlook for the fiscal second quarter. The pullback came as the company’s core order rate swung to a 10% decline in the January quarter from 9% growth in the October quarter. Keysight said the pace of orders will need a few more quarters to normalize. Keysight expects earnings to be in the range of $1.91 to $1.97 per share with revenue of between $1.37 billion and $1.39 billion. According to FactSet, analysts expected the company to earn $1.94 per share on revenue of $1.4 billion. Suva expects the next catalyst for the stock to be its investor day on March 7. “We expect the company to give a 3-year sales outlook for at least mid-single digit growth and EPS growth slightly higher. This event is now de-risked as the company commented on its earnings call that they see low single digit FY23 sales and EPS growth,” read the note. Suva said that during its last investor day three years ago, Keysight hit higher-than-expected growth levels, which were already hindered by Covid closures, geopolitical tensions such as Russia’s war with Ukraine and China’s shipping regulations. KEYS 6M mountain Shares have lost 6.1% during the last six months. Suva expects Keysight will continue to set conservative guidance targets that it will meet and exceed. He also anticipates that new markets, such as automotive and charger testing, and the resumption of growth for aerospace and other end markets will serve as further catalysts for the stock. “Simply put, the negative order growth is just part of a resumption to normal supply chain operations and not share losses,” Suva wrote in the note. Keysight Technologies shares have gained 1% in the past year, but are down 9% since the start of the year. — CNBC’s Michael Bloom contributed to this story.
