UPDATE: Barclays Capital Reiterates Raises PT On Spansion On Substantial Further Upside Potential

In a report published Monday, Barclays Capital analyst Blayne Curtis reiterated an Overweight rating on Spansion (NYSE: CODE), and raised the price target from $30.00 to $40.00.In the report, Barclays Capital noted, “While many (us included) were initially surprised by this merger agreement when it was announced by both companies, given time to more fully analyze the deal, we believe it has the potential to drive substantial value creation for shareholders of the combined entity over the coming years. We lay out our view of what is encapsulated in the $135M in synergies expected by both companies, along with opportunity for further savings (e.g. Fab consolidation/sale). Net, net, we believe there is substantial conservatism built into the expected synergies and see the 50% GM/20% OpM target as just a stopping point along the way to improved profitability. Furthermore, we believe there are sizable revenue / cross selling synergies between the two companies that many may not fully appreciate (e.g. CODE's strong customer base in Japan & the ability to offer customers a full suite of MCU products).”Spansion closed on Friday at $34.61.