Keysight Sailing Through Headwinds With Grace in Q3 and We Raise Our FVE to $180

We are raising our fair value estimate for wide-moat Keysight Technologies to $180, from $174, after it reported strong fiscal third-quarter results and again raised its fiscal year guidance. We’re impressed with Keysight’s ability to offset macroeconomic headwinds, and believe it can continue executing through fiscal 2023 as supply begins to loosen. While we do see signs of demand decelerating from supernormal levels, we don’t expect it to decrease in the short term, and expect it to continue outpacing supply. We view Keysight’s solution-based portfolio with a growing mix of software as highly sticky with customers, which helps lead to both a durable backlog and our wide economic moat rating. Shares rose with the strong results and we view them as fairly valued.