Market Overview

How Cirrus Logic Can Win From A Strong Apple iPhone 6S

How Cirrus Logic Can Win From A Strong Apple iPhone 6S
Related CRUS
What Does Apple Dropping Imagination Mean For Other Apple Suppliers?
18 Biggest Mid-Day Gainers For Tuesday
The Vetr community has downgraded $CRUS to 1.5-Stars (Vetr)
Related AAPL
The Effect On Apple As Phone Upgrade Rates Could Be 'Permanently Lower Than Historical Norms'
A Long Run Of Success For This ETF
Efficient Market Advisors, LLC Buys iShares FTSE EPRA/NAREIT Global Real Estate ex-U. ... (GuruFocus)

In a report published Friday, Piper Jaffray analyst Ruben Roy maintained an Overweight rating on Cirrus Logic, Inc. (NASDAQ: CRUS), with a price target of $44.

Cirrus Logic’s shares have received dipped 6 percent, versus a 4 percent decline in the SOX. The shares came under pressure after Samsung's negative preannouncement.

Analyst Ruben Roy believes that the sell-off was “overdone,” citing two factors:

  1. The company’s guidance “is typically conservative relative to industry expectations”
  2. Recent press reports suggest that Apple Inc.’s (NASDAQ: AAPL) iPhone 6S unit builds “could be higher than typical”

In the report Piper Jaffray noted, “We believe that CRUS is likely to see a meaningful increase in $ content/iPhone in the upcoming iPhone cycle from a new 55nm chip. Based on this increased content, our sensitivity analysis indicates that every 10m unit increase in iPhone 6S production could yield $0.07-$0.08 in incremental EPS for CRUS.”

Roy expects the new iPhone to use a “next-gen CRUS smart codec” that includes “its latest audio codec, DSP and software in a 55nm design.” This would be a highly integrated device that provides improved audio performance “while using a fraction of the board space.”

While the earlier version of the device were selling at around $1, Cirrus Logic has indicates that its next-gen smart codec devices plus embedded software “could yield ASPs in the $2.50-3.50 range.”

Roy added that Cirrus Logic is among “the best long-term technology plays into high volume smartphone OEMs” and recommended “buying the stock on weakness.”

Latest Ratings for CRUS

Apr 2017Pacific CrestUpgradesSector WeightOverweight
Mar 2017OppenheimerDowngradesOutperformPerform
Dec 2016SusquehannaInitiates Coverage OnPositive

View More Analyst Ratings for CRUS
View the Latest Analyst Ratings

Posted-In: Piper JaffrayAnalyst Color Long Ideas Reiteration Top Stories Analyst Ratings Tech Trading Ideas Best of Benzinga


Related Articles (AAPL + CRUS)

View Comments and Join the Discussion!