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UPDATE: Canaccord Genuity Downgrades Cirrus Logic as ASPs Gross Margins Come Under Pressure


In a report published Friday, Canaccord Genuity analyst Bobby Burleson downgraded Cirrus Logic (NASDAQ: CRUS) to a Hold rating, and lowered the price target from $25.00 to $18.00.

In the report, Canaccord Genuity noted, "In light of fairly recent guidance for flat to slight F2014 revenue growth and an expectation for rebounding gross margins following an inventory write down (we thought stable margins beyond June Q), we find management's cautious F14 revenue and gross margin commentary unnerving. In our view, this indicates more limited visibility in CRUS's key relationship with Apple than our earlier understanding, and highlights the risks of such a close tethering to one customer. In our view, multiples for CRUS are likely to remain depressed until investors can regain confidence that market share, ASPs, and gross margins are on solid footing. Perhaps die shrinks to 55nm, in production late 2014 we believe, can help by lowering COGS substantially (we estimate ~35% lower front end manufacturing costs), but this is some ways out."

Cirrus Logic closed on Thursday at $17.76.

Latest Ratings for CRUS

Jan 2021KeyBancUpgradesSector WeightOverweight
Nov 2020Craig-HallumMaintainsBuy
Sep 2020BarclaysUpgradesUnderweightEqual-Weight

View More Analyst Ratings for CRUS
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Posted-In: Bobby Burleson Canaccord GenuityAnalyst Color Downgrades Price Target Analyst Ratings

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