Feltl And Company Upgrades Cypress Semiconductor As It ‘Possibly Unlocked The “CODE” With Makeover Acquisition’


In a research report issued today, Feltl and Company analyst Jeffrey Schreiner upgraded shares of Cypress Semiconductor (NASDAQ:CY) to Buy rating and raised his price target to $13 (from $11), which implies an upside of 25% from current levels. The report comes after the company announced its intention to acquire Spansion (CODE), in an all-stock transaction which provided 2.457 shares of CY to holders of CODE.

Schreiner commented, “We see the CODE acquisition as potentially transformational, providing needed scale to both companies, cross selling opportunities, and improving the position of both companies in key end markets such as industrial/automotive.” He continued, “We believe via the CODE acquisition CY has increased its future auto exposure, while the combined company more than likely becomes a broader supplier to auto end markets.”

Furthermore the analyst wrote, “We congratulate CY management on its ability to find greater revenue scale, while acquiring a business seeing increasing revenues and SAM (selling available market) expansion. We believe the acquisition of CODE shifts CY’s focus towards long product cycle markets such as auto/industrial. While the near-term could remain choppy for CY, we believe investors should begin accumulating CY stock given our view the CODE acquisition potentially transforms CY’s future business model.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jeffrey Schreiner has a total average return of -11.5% and a 23.1% success rate. Schreiner has a average return when recommending CY, and is ranked #3330 out of 3391 analysts.

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