TD Synnex price target raised to $140 from $118 at Barclays

Barclays raised its price target on TD Synnex (SNX) to $140 from $118, while maintaining an Equalweight rating, citing expectations for mid-single-digit billings growth and 8% EPS growth in FY25, alongside mid-teens EPS growth for FY26-27, with the new target based on a 10x P/E multiple on FY26 EPS of $14.00. However, the firm expressed caution regarding temporary gross profit benefits from refresh cycles and an uncertain macroeconomic environment, which could limit near-term upside despite strength driven by SNX's largest customer.

Analysis

Barclays has raised its price target on TD Synnex (SNX) to $140 from $118, while reaffirming an Equalweight rating, signaling a mixed but cautiously optimistic outlook. The new target is predicated on a 10x price-to-earnings multiple applied to a fiscal year 2026 EPS forecast of $14.00, supported by expectations of mid-single-digit billings growth and 8% EPS growth in FY25, accelerating to mid-teens EPS growth in FY26 and FY27. However, the firm's decision to maintain an Equalweight stance reflects significant near-term concerns. Barclays notes that current gross profit strength, driven by a product refresh cycle, is likely temporary and will revert. Furthermore, recent outperformance in the ODM and CM business was heavily dependent on the company's single largest customer, indicating concentration risk. The outlook is further constrained by an uncertain macroeconomic environment and tariff situation, which limit potential upside, while demand from the second-largest customer, though recovering, remains below expectations.

Key Decisions for Investors

• Given the Equalweight rating alongside a higher price target, investors may consider holding existing positions, as the analysis suggests the stock is fairly valued with a balanced risk-reward profile in the near term.
• Investors should closely monitor gross profit margins for signs of reversion once the current refresh cycle abates, as Barclays identified this as a temporary benefit.
• Monitor customer concentration risk by tracking announcements related to TD Synnex's largest client, as well as the pace of demand recovery from its second-largest customer.
• Factor in external headwinds such as macroeconomic shifts and tariff policy changes, which Barclays flags as potential caps on the stock's near-term performance.