Top Analyst’s Take on Cypress Semiconductor Corporation (CY) as CEO Transition Unfolds

Morgan Stanley top analyst Craig Hettenbach reiterates an Equal Weight rating on Cypress Semiconductor Corporation (NASDAQ:CY), as the company selected its second CEO in a long history of 34 years with the same CEO leading the company.

There are those in the investment world that grew increasingly frustrated with Cypress leadership, so initially when CY announced at the end of April that its CEO and founder TJ Rodgers was on the outs, the news was met enthusiastically. However, now that Cypress has chosen a candidate from inside the company, Hassane El-Khoury, Hettenbach questions the company’s direction, considering this a missed opportunity to establish a better, more confident relationship with investors. Based on feedback from investors, with stock selling off at a heavy volume, Hettenback notes that clearly he is not the only one left surprised by this move.

Hettenbach explains, “We thought the ideal scenario included the hiring of a CEO from outside the company, which would help to change the narrative and serve as a catalyst for investors to reengage on the stock. At the same time, a potential drawback with the choice of an internal hire is that the former CEO stepped down abruptly and as such internal candidates were not groomed for the job or provided visibility with the Street. Accordingly, it could be a period of time before investors gain access to and are able to evaluate Mr. El-Khoury and his plan to lead Cypress.”

For now, Hettenbach and the investment community wait to see if CY can change it struggling narrative. Right now, from Hettenbach’s eyes, CY’s faltering momentum hinges upon Mr. Khoury, who has the keys to become a new kind of catalyst. Whether the catalyst will be positive or lead to more frustration all depends on CY’s new leadership.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, top five-star Craig Hettenbach is ranked as a top 100 analyst at #84 out of 4,110 analysts. Hettenbach has earned a high success rate of 69% and realizes a solid 24.8% in his yearly returns.

TipRanks analytics exhibit CY as a Buy. Based on 5 analysts polled in the last 3 months by TipRanks, 3 rate a Buy, while 2 maintain a Hold. The 12-month average price target is $13.00, marking a 17% upside from where the shares last closed.


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