CFRA MAINTAINS BUY RATING ON SHARES OF DOLBY LABORATORIES, INC.
9:20 pm ET May 5, 2023
We cut our target to $94 from $96 on a P/E of 29.5x, above its three-year historical average due to a more positive outlook, using our next-12-month EPS view of $3.18. We increase our FY 23 EPS estimate to $3.48 from $3.45 and FY 24's to $3.86 from $3.73. DLB posted Q2 revenue of $376M, above consensus by $26M, and non-GAAP EPS of $1.26 beat by $0.29. Revenue outperformance (+12.4% Y/Y) was primarily driven by demand for Dolby Atmos, Dolby Vision and its imaging patents, as well as strong growth in Products and Services (+18% Y/Y). Not surprisingly, lower PC unit shipments and weakness in the consumer electronic markets depressed sales in its foundational audio technologies. We expect that this will continue to be a challenge for the remainder of FY 23. Despite the continuing pressures in this category, we highlight that strength in Vision, Atmos, and its imaging patents will more than offset the decline in foundational technologies given the pick-up in momentum and demand from its growing range of partners. |
