November 17, 2021 08:44 AM ET...
CFRA Maintains Hold Opinion on Shares of Dolby Laboratories, Inc. (DLB 89.00***):
We lower our 12-month target price to $94 from $100, on a P/E of 24x, aligned with its three-year historical average, using our FY 22 (Sep.) EPS estimate. We start our FY 23 EPS estimate at $4.40, and raise FY 22 to $3.92 from $3.91. DLB posted Q4 revenue of $285M, below expectations of $300M, and non-GAAP EPS of $0.58, a beat of $0.02. Revenue was weaker than anticipated due to timing in the payment of a contract, and lower broadcast sales. Looking ahead, we see reasons for optimism from accelerating growth of Dolby Atmos and Vision, as well as improved performance in Dolby Cinema from more people returning to movie theaters. This is offset by supply chain issues which would impact consumer electronics, in turn casting uncertainty in DLB’s foundational audio revenues, potentially a large drag on sales. After a strong year of growth on improving business conditions, we expect DLB’s business to post modest gains in FY 22, and profitability to normalize on returning travel and hiring expenses |
