Keysight Earnings: We Expect Ongoing Softness Ahead but Continue to See Long-Term Upside

We modestly trim our fair value estimate for shares of wide-moat Keysight Technologies to $166, from $170, to reflect lowered expectations for fiscal 2024. We reiterate our confidence in Keysight for the long term, and its ability to rebound from current soft end-market demand. In the fiscal fourth quarter, Keysight saw a continuation of the weak spending environment for telecom customers that has hamstrung orders across fiscal 2023. The firm is now encountering additional weakness out of its consumer and semiconductor end markets, particularly in China, which leads us to taper our short-term forecasts. We now expect a low-single-digit sales decline in fiscal 2024, driven entirely by weaker end markets.