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Needham & Company Upgrades Cypress Semi (CY) to Buy; Risk Priced In

February 19, 2013 8:03 AM EST Send to a Friend
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Price: $10.80 -0.55%

Rating Summary:
    7 Buy, 10 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 12 | Down: 21 | New: 21
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Needham & Company upgraded Cypress Semi (NASDAQ: CY) from Hold to Buy with a price target of $13.00.

The firm comments, "We downgraded CY on 1/24/12 when the stock was $19.05 due to our concerns of an unfavorable pricing environment in the capacitive touch market, SRAM weakness, non-Apple tablet inventory correction and premium valuation compared to peers. With the stock down ~50% since our downgrade, we believe much of these risks are now priced in. Since then, CY has realigned its OPEX structure to reflect a lower revenue profile, positioned itself in the growing Chinese low-mid range handset market, carved out a strong position in the niche eReader market and is benefiting from a cyclical recovery in the communication equipment market benefiting its SRAM segment. With its strong dividend yield and acquisition of Ramtron, we believe the shares look attractive. Stock is trading under 9x P/E 2014E and under 12x based on 2014 Street estimates. Overall the sentiment around the capacitive touch space has improved during the past three months, but CY is still lagging behind its peers, up 10% vs SYNA +42% and ATML +61%. We think the shares are undervalued and fair value is closer to $13 or 12x P/E 2014E."

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 $9.86 yesterday.




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