Wedbush analyst Betsy Van Hees came out with her views on Cypress Semiconductor Corporation (NASDAQ:CY), after the company sent a letter to Integrated Silicon Solution, Inc. (NASDAQ:ISSI) Board of Directors increasing its offer proposal to $20.25 in cash per share or about $680MM (from $19.75 per share or $656MM), a $0.25 increase to Uphill’s counter bid of $20.00.
Van Hees wrote, “While we see the proposed tuck-in acquisition of ISSI as immediately accretive ($0.02 to $0.04 with a close of date of Q3:15) we don’t believe it is a must have asset. We believe with CY’s 1) underlying fundamentals solidly intact, 2) cost synergies from the Spansion merger ahead of schedule (recently raised to $160MM annually by Q4:17) and 3) the dividend sacred that without ISSI, CY remains one of the most compelling ideas in our universe for 2H:15.”
Furthermore, “With no assurance that the potential acquisition by Uphill will be able to achieve all the regulatory approvals necessary, we expect CY to continue with its shrewd negotiating tactics and recommend investors continue to take advantage of pullbacks to buy the stock. Our 12-month PT of $17 is based upon 16x our 2016 pro forma EPS estimate of $1.06.”
The analyst reiterated an Outperform rating on Cypress Semiconductor Corporation’s stock, with a price target of $17, which implies an upside of 24.5% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Betsy Van Hees has a total average return of 19.9% and a 61.8% success rate. Hees has a -4.1% average return when recommending CY, and is ranked #187 out of 3610 analysts.