Synaptics (SYNA) Sell-Off on Cost Cutting an 'Over Reaction' - Needham & Company

Needham & Company analyst Rajvindra Gill reiterated a Buy rating and $88 price target on Synaptics (NASDAQ: SYNA) saying he sees a over reaction in the shares today amid the cost cutting moves.

Gill commented, "Last night, Synaptics announced a workforce reduction of 160 positions. SYNA stock is down 11% on relatively high volume. Based on our projected estimates of savings from the restructuring, we believe the Street's reaction is excessive. Revenues would need to be serially depressed at around June’s qrtly revenue of $320MM in order to justify current valuation. With estimated savings between $100,000 to $200,000 per person or $16MM-$32MM, averaged over the next four quarters, our model shows that Synaptics’ operating profit target of roughly 15% can be achieved post-cost reduction with modest revenue growth predictions."

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

Shares of Synaptics closed at $60.50 yesterday.

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