Needham & Company Downgrades Mentor Graphics (MENT) to Hold

Needham & Company downgraded Mentor Graphics (NASDAQ: MENT) from Buy to Hold.

Analyst Richard Valera commented, "MENT's sharply lowered F16 guidance and tepid initial F17 guide were surprising. While we expect there will be a rebound in MENT's emulation business in 4Q and beyond, we suspect the company will be hard pressed to show growth in F17 with the new CDNS box in the market. As well, we expect a continued challenged outlook for MENT's IC software business. If these factors indeed translate to management's guidance of LSD% growth in F17, and the company doesn't alter its cost structure, we see another year of very modest EPS growth making it tough to justify multiple expansion from the current ~13-14x. As such, acknowledging the shares may be washed out, we downgrade to Hold from Buy."

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

Shares of Mentor Graphics closed at $27.78 yesterday.

You May Also Be Interested In

• Needham says State AGs delay on Paramount Skydance (PSKY) deal 'will NOT derail the deal'
• AngioDynamics (ANGO) PT Raised to $20 at Canaccord
• BofA Securities Downgrades International Paper (IP) to Neutral