TD SYNNEX's (SNX) specialized go-to-market approach and emphasis on value-added services are expected to help the company expand its share of the distribution total addressable market over time, RBC Capital Markets said in a Friday note.

During investor meetings with RBC in Toronto, SYNNEX executives, including Chief Executive Patrick Zammit and Chief Financial Officer Marshall Witt, expressed confidence in the company's growth trajectory and outlined strategies focused on IT distribution expansion, value-added services, and strong free cash flow generation, RBC said.

"[W]e believe it is well poised to capitalize on structural tailwinds driven by IT spending investment in fast-evolving technologies such as Cloud, Big Data, Analytics, AI, IoT, Software, and AR/VR," RBC said.

SYNNEX reiterated its primary goals of achieving profitable growth, generating about $1.1 billion in free cash flow in fiscal year 2025, and returning 50% to 75% of that free cash flow to shareholders through dividends and share buybacks, according to the note.

Despite near-term tariff challenges, SYNNEX expects Q2 margin gains from passing on import costs to customers, while also seeing potential upside from increased North American demand and a new trade agreement with the UK, RBC said.

RBC has an outperform rating on SYNNEX with a price target of $145.

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