Mizuho Securities analyst Vijay Rakesh reiterated a Buy rating on Cypress Semicon (NASDAQ: CY) today and set a price target of $21. The company’s shares opened today at $14.81.
Rakesh commented:
“We hosted CYs CFO, Thad Trend, and IR, Colin Born, in NYC. We believe CY remains well-positioned with concerns over softness at a key smartphone OEM OVERDONE as core inventory (ex- the major smartphone customer) was FLAT q/q. CY continues to see automotive with a LT CAGR at 8-12%, growth in IoT at a 17% CAGR and USB-C. With its leverage targets achieved, it opens the door for potential share buybacks and margin-accretive M&A. CY remains confident in its 48% GM target exiting 2018 and its LT 50% target. CY’s CEO has been buying stock as well. We are reiterating our Buy and $21 PT. KeyPoints We believe excluding inventory for a major smartphone OEM, overall inventory is flat q/q. Some key takeaways from our meetings: We believe the biggest investor concern was inventory up 2% q/q, but we believe all the increased inventory was for USB-C for one major wireless customer. We believe inventory in all other segment was FLAT q/q and healthy.”
According to TipRanks.com, Rakesh is a top 100 analyst with an average return of 27.2% and a 67.7% success rate. Rakesh covers the Consumer Goods sector, focusing on stocks such as Advanced Micro Devices, NXP Semiconductors, and Skyworks Solutions.
Currently, the analyst consensus on Cypress Semicon is Strong Buy and the average price target is $21.33, representing a 44.0% upside.
In a report issued on April 27, Needham also maintained a Buy rating on the stock with a $23 price target.
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Based on Cypress Semicon’s latest earnings report for the quarter ending March 31, the company posted quarterly revenue of $582 million and quarterly net profit of $9.08 million. In comparison, last year the company earned revenue of $532 million and had a GAAP net loss of $45.78 million.
Based on the recent corporate insider activity of 55 insiders, corporate insider sentiment is neutral on the stock.
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Cypress Semiconductor Corp. designs, develops, manufactures and markets a broad range of high-performance solutions for embedded systems, from automotive, industrial and networking platforms to highly interactive consumer devices. Its programmable systems-on-chip, general-purpose microcontrollers, analog ICs, wireless and USB-C based connectivity solutions and memories help engineers design differentiated products. The company operates through the following segments: Microcontroller and Connectivity Division (MCD), and Memory Products Division (MPD). The MCD segment focuses on microcontroller (MCU), analog and wireless and wired connectivity solutions.
