How Apple's iPhone Announcement Reveled Benefits For Cirrus Logic

Cirrus Logic, Inc. CRUS is one of the companies that stands to gain from the announcement of Apple Inc. AAPL's iPhone 7 and 7 Plus, according to Stifel analysts Tore Svanberg and Erik Rasmussen. As a result, the analysts have boosted the price target from $55 to $58 while reiterating a Buy rating on the company's shares.

The brokerage pointed out that the removal of the 3.5mm audio port and stereo speakers would be a positive factor for Cirrus following the improvements to audio/voice technology disclosed by the tech bellwether. The new smartphone would be shipped "in-box with both EarPods with Lightning Connector and a Lightning to 3.55mm Headphone Jack Adapter."

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The analysts pointed out that these changes were on the expected lines and expressed confidence that these would fuel increased value for Cirrus, as the audio and voice features are poised for the new era in electronics.

In a research note to clients, the brokerage said, "Overall, we are expecting Cirrus' content to be up roughly 70 percent y/y, or in the $5.50–$6.00 range, which now includes 2 amplifiers, 1 smart codec, 1 digital headset and 1 adapter (MEMS not included, as this opportunity is still viewed a couple of years out before the company can reach capacity of tens of millions of units shipped)."

Stifel thinks it would be able to provide more insight and visibility after the iPhone maker ships the product, though the latest event is a positive factor for Cirrus.

At time of writing, Cirrus was down 0.37 percent at $51.44.

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