In a series of estimate revisions, Needham analyst Rajvindra Gill came out today with a research note on Cypress Semiconductor Corporation (NASDAQ:CY), reducing his earnings estimates for CY on the back of muted 2H15 recovery. The analyst also reiterated a Buy rating on the stock with a price target of $20, which implies an upside of 71.5% from current levels.
Gill explained, “In conjunction with our industry note “Avoid the Summer Heat, Let Consensus Estimates Cool Off,” we are lowering our estimates from Cypress Semiconductor. After hearing commentary from TSMC & FCS, we believe a more gradual recovery will be realized in 2H15 as opposed to a quick “snap back,” and consequently we believe current consensus forecasts are too aggressive.”
“Our 2016 estimate for Spansion related revenue has declined to ~2-3% Y/Y growth (using pro-rated 1Q15) as we believe Cypress’ strategy is to walk away from low-margin business and focus on margin expansion. Our Cypress related revenue growth declines to 3.9% Y/Y in 2016 due to zero TrueTouch sales for smartphones (sold the business to Parade) and a less aggressive ramp of PSoC products due to softer macroeconomic demand.”, the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rajvindra Gill has a total average return of 17.8% and a 57.8% success rate. Gill has a -0.2% average return when recommending CY, and is ranked #98 out of 3712 analysts.
Out of the 10 analysts polled by TipRanks, seven rate Cypress Semiconductor stock a Buy, two rate the stock a Hold and one recommends to Sell. With a return potential of 40%, the stock’s consensus target price stands at $16.30.