August 07, 2024 23:25 pm ET.. CFRA Maintains Hold Rating on Shares of Dolby Laboratories, Inc. (DLB 73.22***)
We lower our price target by $7 to $76, 20x our FY 25 (Sep.) EPS view, below DLB’s 5-year average (~21x) on lingering softness in device sales. We lower our FY 24 EPS view by $0.01 to $3.69 and FY 25’s by $0.23 to $3.80. DLB prints Jun-Q sales of $289M (-3% Y/Y) and EPS of $0.71 (+29%), above consensus, with a weaker-than-expected Sep-Q guide. Licensing sales (92% of Q2 total) fell 2% Y/ Y, with mobile (24% of licensing) growing 25% on new smartphone releases, offset by a 7% decline in broadcast (36%). Products and Services (8%) fell 14% Y/Y on weak box office receipts, though we expect a rebound in ‘25 as new titles are released. Dolby Atmos and Dolby Vision continue to gain momentum, including in automotive applications (DLB now partners with 20 OEMs) and supportive broadcast content (especially sports, including many high-profile broadcasts like the Olympics), but we expect this strength to be offset by continued weakness in foundational audio technologies (and overall device sales) in the near term |
