Needham downgrades Cypress, defends peers

Needham's Rajvindra Gill has cut Cypress (CY -15.6%) to Hold in response to its Q3/Q4 warning. However, he also argues the warning shouldn't be seen as a "direct negative read" for mobile IC rivals/peers Synaptics (SYNA +1.4%), Atmel (ATML -2.5%), MagnaChip (MX +0.1%), and Silicon Image (SIMG -0.9%).

Gill thinks "end of life actions" for certain Nokia products are hurting Cypress, as are year-end inventory cuts at Samsung, Japanese exposure, and customer push-outs (believed to be from Sony and/or Chinese OEMs). He suspects customer ramp uncertainty and "perceived share loss" to Synaptics will limit 2014 earnings and offset Cypress' operating leverage.

Though Atmel continues to trade lower, Synaptics has turned positive after dropping in premarket trading.

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Comments (4)
  • phemale60
    , contributor
    Comments (3028) | Send Message
    so is $CY going to keep falling? I bought more last week on bad advice, now getting killed. Sell half? How long before begins to move up again? or will it keep falling into oblivion??
    24 Sep 2013, 02:32 PM Reply Like
  • vmetla
    , contributor
    Comments (69) | Send Message
    I see that $CY is a range bound, might drop to 8.5+ if the whole market drops, but it will come back to 10-11 range again. Btw, you are getting a 11c dividend every quarter.
    24 Sep 2013, 03:13 PM Reply Like
  • phemale60
    , contributor
    Comments (3028) | Send Message
    I thought I saw somewhere they were dropping the dividend. If not, some consolation. I did buy a bit high anyway. Thanks!
    24 Sep 2013, 03:45 PM Reply Like
  • MarketBuster
    , contributor
    Comment (1) | Send Message
    I am not sure if CY's revenue pipeline is strong enough to sustain this dividend payout. I am seeing strong competition from SYNA and ATML. I don't see this stock moving beyond 10-11 USD in the near term.
    24 Sep 2013, 04:34 PM Reply Like
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