We See Keysight’s Indicators Continuing To Flash Green Into Fiscal 2023 and Maintain Our $180 FVE

We maintain our $180 fair value estimate for wide-moat Keysight Technologies after a strong fiscal fourth quarter and positive fiscal first quarter guidance. Keysight enjoyed robust growth for each of its segments and end markets in fiscal 2022, and we see order trends remaining healthy through fiscal 2023. We also credit management for margin stability through inflation, and we think margins can improve from fiscal 2022 levels as supply eases for Keysight’s components. While the short-term macroenvironment remains uncertain, we have confidence in Keysight’s execution resulting from its sticky position in research and development labs and dominance of testing equipment for critical communications infrastructure where we don’t see spending slowing down. Shares look fairly valued to us.