Synaptics downgraded to Sector Weight from Overweight at KeyBanc

KeyBanc analyst John Vinh downgraded Synaptics to Sector Weight from Overweight without a price target The analyst believes Synaptics will underperform its internet of things peers given limited growth catalysts within its enterprise and automotive segment, which represents almost 60% of its overall revenue. This segment represents the highest margin segment for the company, and without it returning to normalized run rates, it will be “extremely difficult” for Synaptics to get back to its model target of 57% gross margin, the analyst tells investors in a research note. KeyBanc says enterprise had benefited from a pull-forward in demand during the pandemic, but now that we’ve transitioned back to the office or to a hybrid environment, demand for these products is unlikely to return and likely to lag any recovery in enterprise spending.