Last Update 09 Apr 26

Fair value Increased 1.40%

KEYS: Future Returns Will Rely On Durable AI And Wireline Order Momentum

The analyst price target for Keysight Technologies has moved modestly higher to reflect a fair value estimate of about $306. Analysts point to stronger order momentum across AI, wireline, and aerospace and defense, along with updated revenue and earnings models following recent Q1 results.

Analyst Commentary

Recent research has been largely constructive on Keysight Technologies, with several firms updating models and price targets after fiscal Q1 results and stronger order trends. Analysts are focusing on how AI, wireline, and aerospace and defense exposure could influence growth, while also flagging areas where execution and valuation need close attention.

Bullish Takeaways

Bullish analysts see fiscal Q1 as a strong data point, citing core orders that reached 22% year over year growth and a second consecutive quarter of meaningful revenue acceleration tied to AI and aerospace and defense demand.
Several firms raised price targets into the US$268 to US$340 range after Q1, reflecting updated revenue and earnings models and an expectation that Keysight can execute on a higher earnings framework, including an increased FY26 adjusted EPS growth target of more than 20%.
Wireline strength is a key support for the growth story, with record wireline orders surpassing wireless for the first time and some analysts highlighting that wireline revenue has already eclipsed wireless, which they expect to recover in the second half of 2026.
Major banks such as JPMorgan and Goldman Sachs point to Keysight's exposure to AI test and other secular drivers as support for their higher targets, with JPMorgan materially lifting revenue and earnings forecasts and Goldman Sachs emphasizing the company as well positioned for strong growth, including potential benefits from deal integration synergies.

Bearish Takeaways

Not all research is outright positive, with some Bearish analysts or more neutral voices assigning Equal Weight or Neutral views. This signals that, despite higher targets, they see a more balanced risk or prefer to wait for additional confirmation of execution.
While many firms raised targets sharply, a few increases were relatively modest. This can indicate caution around how much of the AI and wireline benefit is already reflected in valuation after the Q1 reset.
Comments about wireless recovering later, in the second half of 2026, point to a mixed demand picture across segments. This could matter if wireline or AI related orders slow or if broader demand does not stay as strong as in recent quarters.
The higher FY26 adjusted EPS growth framework of more than 20% sets a more demanding execution bar, and any shortfall versus the updated targets could affect how investors view the premium multiples implied by recent price target moves.

What's in the News

Keysight issued revenue guidance for Q2 FY26 of US$1.690b to US$1.710b, with the midpoint implying approximately 30% year over year growth, giving you a clear management view of near term expectations (Corporate guidance).
The board approved an amendment to declassify the Board of Directors at the March 19, 2026 AGM. This move can change how often directors stand for election and how quickly shareholders can influence board composition (Company bylaws).
Share repurchases continued, including 423,055 shares bought for US$75.06m under the November 24, 2025 authorization, and completion of 9,567,032 shares repurchased for US$1.38987b under the March 7, 2023 program. These actions affect share count and capital return profile (Buyback tranche updates).
Keysight announced multiple AI data center and high speed interconnect test products such as AresONE 1600GE and expanded 1.6T and 224G validation platforms. These reflect a focus on AI networking, Ethernet, and data center interconnect testing (Product related announcements at OFC 2026 and DesignCon 2026).
A series of collaborations with companies including Qualcomm, Samsung, Ericsson, Point2 Technology, and Airbus highlights Keysight’s role in areas such as AI driven RAN, RF digital twins, 5G Advanced, pre 6G testing, and non terrestrial networks. These developments may influence how investors view its position in next generation wireless and AI infrastructure ecosystems (Client announcements and joint demos at MWC 2026 and other events).

Valuation Changes

Fair Value: The updated fair value estimate has risen slightly from $301.54 to $305.77 per share.
Discount Rate: The discount rate has moved marginally higher from 8.45% to 8.47%, indicating a very small change in the required return used in the model.
Revenue Growth: The forecast revenue growth rate is now 11.48%, compared with the prior 11.46%, reflecting a very small adjustment to long term growth assumptions.
Net Profit Margin: The projected net profit margin has edged down from 19.52% to 19.33%, a modest reduction in expected profitability levels.
Future P/E: The assumed future P/E multiple has risen slightly from 42.36x to 43.38x, implying a somewhat higher valuation multiple in the updated framework.

4 views

Key Takeaways

Strong AI-driven demand, leadership in next-generation wireless technologies, and expansion into software are fueling sustainable growth and reducing reliance on traditional hardware.
Robust government and defense spending, along with advanced R&D and acquisitions, position Keysight for multi-year stability and strengthen its competitive advantages.
Risks from tariffs, macroeconomic shifts, and sector concentration could squeeze margins and earnings if mitigation, innovation, and diversification efforts lag or underperform expectations.

Catalysts

About Keysight Technologies

Provides electronic design and test solutions worldwide.What are the underlying business or industry changes driving this perspective?

Adoption of AI across digital infrastructure is accelerating demand for advanced testing solutions in compute, memory, networking, and interconnect, with Keysight's AI-focused investments leading to double-digit wireline and commercial comms growth; this trend is expected to drive sustained top-line revenue growth as AI workloads expand into new customer segments and applications over the coming years.
Early engagement and leadership in next-generation wireless technologies-such as ongoing 5G-Advanced deployments, direct-to-cell, non-terrestrial networks, and active participation in 6G research-position Keysight to capture significant share as new wireless standards roll out globally, supporting future revenue growth and a stable order outlook.
Expansion of software and recurring service offerings, now comprising 36% and 28% of total revenue respectively, increases gross and net margins by enhancing revenue stability, improving product mix, and reducing cyclicality from traditional hardware segments.
Increased government and defense spending in both the US and Europe is driving robust growth in aerospace/defense end markets, while sovereign R&D priorities (notably in quantum computing and advanced semiconductors) enable Keysight to benefit from multi-year funding cycles, supporting both higher margins and long-term earnings visibility.
Investments in advanced R&D and strategic M&A-highlighted by pending acquisitions in optical and simulation software-expand Keysight's differentiation in emerging areas such as quantum, photonics, electric vehicles, and next-generation semiconductors, strengthening competitive barriers and fortifying organic top-line growth potential.

Keysight Technologies Earnings and Revenue Growth

Keysight Technologies Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Keysight Technologies's revenue will grow by 11.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 17.3% today to 19.3% in 3 years time.
Analysts expect earnings to reach $1.5 billion (and earnings per share of $9.16) by about April 2029, up from $981.0 million today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 43.6x on those 2029 earnings, down from 55.7x today. This future PE is greater than the current PE for the US Electronic industry at 29.5x.
Analysts expect the number of shares outstanding to decline by 0.35% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.47%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

The newly announced tariffs, which are expected to result in $150–$175 million in annual additional expenses, pose a significant risk if mitigation actions (supply chain optimization, pricing, supplier negotiations) prove less effective or take longer than planned; this could negatively impact net margins and earnings, particularly in the short-to-medium term and may also affect top-line competitiveness if costs are passed on to customers.
While current AI-fueled growth is strong, management acknowledges that a substantial portion of recent gains in wireline and data center market demand has come from high levels of investment and accelerated technology adoption; if AI infrastructure investments normalize, slow, or become cyclical, there could be a structural deceleration in demand that would weigh on revenue growth and earnings durability.
The company's exposure to global macroeconomic and geopolitical risks-especially ongoing and unpredictable trade policy changes, shifting government priorities in defense spending, and regulatory hurdles for international acquisitions (such as Spirent, Synopsys Optical Solutions, and Ansys PowerArtist)-could limit or delay revenue opportunities and amplify earnings volatility, particularly in high-growth international markets.
Management notes that certain end markets, notably automotive and consumer electronics, continue to face challenges and are growing slower than others; prolonged stagnation or decline in these verticals could result in concentration of revenue dependence on faster-growing segments (e.g., AI data centers, aerospace/defense), which increases Keysight's exposure to market-specific cyclical risks, adversely affecting long-term top-line growth and business stability.
Keysight's strategy to rely on recurring revenue from software and managed services, as well as expansion into new verticals (like quantum and advanced semiconductors), requires sustained and increasing R&D investment; if the pace of innovation, integration, or customer adoption in these areas falters-or if returns on R&D diminish relative to spend-there is risk of margin compression and below-target net margin expansion relative to longer-term projections.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $305.77 for Keysight Technologies based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $340.0, and the most bearish reporting a price target of just $220.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $7.9 billion, earnings will come to $1.5 billion, and it would be trading on a PE ratio of 43.6x, assuming you use a discount rate of 8.5%.
Given the current share price of $318.33, the analyst price target of $305.77 is 4.1% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Keysight Technologies?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

AI And Next Generation Wireless Will Unlock New Horizons