Cirrus Logic: Jefferies Downgrades and Stock Slides

Cirrus Logic (CRUS) shares are down sharply this morning after Jefferies & Co.’s Adam Benjamin cut his rating on the stock to Hold from Buy. On the other hand, he actually lifted his price target for the stock to $7 from $6.50 and increased his FY ‘09 and ‘10 estimates.

In late March, Benjamin wrote a bullish note on the company, asserting that Cirrus’ audio chips will be included in the next generation Apple iPod. The stock rallied, after which several other analysts downgraded the shares.

And now Benjamin himself is urging investors to take profits. “We believe the risk/reward profile is now balance and investors should step to the sidelines,” he writes in a research note. “While Cirrus will likely benefit from a ramp at Apple starting in Q3, we believes expectations for that ramp are now high and revenue growth drivers outside of Apple are limited.”

Benjamin upped his EPS estimate for the March 2009 to 37 cents from 36 cents; for FY 2010 he goes to 50 cents from 47 cents.

CRUS this morning was off 45 cents, or 5.4%, at $7.