Market Overview

UPDATE: DA Davidson Downgrades Cadence Design Systems to Neutral; Acquisition Displaces Dividend

Related CDNS
Cadence Design Systems Beats On Q3 But Outlook Disappoints
Stocks Hitting 52-Week Highs

DA Davidson downgraded Cadence Design Systems (NASDAQ: CDNS) from Buy to Neutral and lowered the price target from $17.00 to $15.00.

DA Davidson noted, "CDNS has entered a definitive agreement to acquire Tensilica, a leading provider of dataplane processing IP, for $350 million, net of $30 million cash. … CDNS has ~$830 million in cash (net cash of $380 million) with roughly 50% held onshore. Last year the company posted an impressive $316 million in operating cash flow; the acquisition price substantially exceeds this level and will leave CDNS in a neutral net cash position. More importantly, this diminishes the likelihood of CDNS initiating a dividend or meaningful stock repurchase program this year (could buy 9% of outstanding), thus removing a potential stock catalyst."

Cadence Design Systems closed at $14.58 on Monday.

Latest Ratings for CDNS

DateFirmActionFromTo
Oct 2014Pacific Crest
Oct 2014DA DavidsonReiteratesBuy
Jul 2014JP MorganDowngradesOverweightNeutral

View More Analyst Ratings for CDNS
View the Latest Analyst Ratings

Posted-In: DA DavidsonAnalyst Color Downgrades Analyst Ratings

 

Related Articles (CDNS)

Around the Web, We're Loving...

Get Benzinga's Newsletters