Keysight Technologies Inc. (NYSE:KEYS) saw its stock surge 24% after releasing first-quarter results that topped expectations and after management raised its fiscal 2026 outlook following stronger-than-anticipated order activity.
The firm reported that core orders increased 22% year-over-year in the quarter ended in January. Revenue and adjusted earnings per share came in ahead of Wall Street forecasts, with EPS beating consensus by $0.17.
In response to the upbeat top-line order performance, company management updated its fiscal 2026 framework, increasing the targeted adjusted EPS growth to more than 20% year-over-year. That revised framework implies fiscal 2026 adjusted EPS of at least $8.59, which is above the prevailing consensus estimate of $8.11.
Following the results, Bank of America upgraded Keysight from Neutral to Buy, citing broad-based strength in orders. BofA highlighted that core orders rose 22% year-over-year in 1QF26 (January), well above its prior expectation of 11%. The firm noted management’s decision to lift the FY26 adjusted EPS growth target to more than 20% year-over-year from an earlier target of more than 10%.
BofA also revised its valuation approach for Keysight, raising its price objective to $340 from $195. The new target is based on a 33x multiple applied to BofA’s raised 2027 adjusted EPS estimate, compared with the prior 21x multiple. The analysts said their 33x target multiple is a premium to the 31x peer average to reflect Keysight’s above-average margins and industry-leading market share.
The company’s combination of above-consensus order growth, an upgraded EPS-growth framework, and subsequent analyst upgrades contributed to the sharp intraday move in the stock. The new fiscal 2026 guidance point of at least $8.59 in adjusted EPS places management’s outlook materially above the consensus figure of $8.11, a key element cited by BofA in its rating change and price-target increase.
Investors will likely focus on whether the pace of core order growth seen in the quarter can be sustained through the remainder of the fiscal year and on execution against the newly elevated adjusted EPS framework.
Key points
- Core orders grew 22% year-over-year in Q1 (ended January), outpacing expectations and driving the stock rally.
- Management raised fiscal 2026 adjusted EPS growth guidance to more than 20% year-over-year, implying at least $8.59 in adjusted EPS versus $8.11 consensus.
- BofA upgraded Keysight to Buy, raised its price target to $340 from $195, and applied a 33x multiple to its raised 2027 adjusted EPS estimate.
Risks and uncertainties
- Sustainability of elevated order growth - the company’s improved guidance rests on continued strong order trends; a slowdown would affect earnings and valuation expectations (impacts technology and capital equipment sectors).
- Market reaction volatility - the 24% stock jump reflects sharp investor re-pricing that could reverse if subsequent results or orders disappoint (impacts financial markets and investor sentiment).
- Dependence on management guidance - the raised fiscal 2026 framework materially moves consensus expectations; any revision downward would create downside risk to the company’s shares (impacts test-and-measurement and related industrial sectors).