Nomura Hopeful Cypress (CY) Decline Has Stabilized

January 8, 2013 1:10 PM EST
Get Alerts CY Hot Sheet
Price: $11.18 --0%

Rating Summary:
    17 Buy, 9 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 28 | Down: 28 | New: 23
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This morning shares of Cypress Semiconductor Corporation (Nasdaq: CY) declined after the company warned investors that its Q4 results would fall short of expectations. Preliminary revenue was forecast at $177 to 179 million vs $193.50 million expected. EPS was seen at $0.03 to $0.04 per share compared to estimates of $0.14.

Commenting on the results, analysts at Nomura noted that downside was driven mainly by the distribution channel and was across all geographies and end markets, especially in the last two weeks of December. On a positive note, analyst think the decline has stabilized.

"Customer backlog stabilized in the past two weeks, which could signal that Q1 is the bottom for revenue and bookings. Lead times remain at historic lows. Furthermore, management remains optimistic with design activities and new product momentum," said analyst Sidney Ho.

Ho believes Cypress can generate significant operating leverage when revenue recovers, as the company has put heavy emphasis on operating expense control.

Nomura Securities has a Buy rating on Cypress Semi (NASDAQ: CY) with a price target of $12.00.

For an analyst ratings summary and ratings history on Cypress Semi click here. For more ratings news on Cypress Semi click here.

Shares of Cypress Semi closed at $11.05 yesterday.

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