Cirrus (CRUS) Stock Tumbles, Pacific Crest Cuts to 'Sector Weight'
NEW YORK (TheStreet) -- Shares of Cirrus Logic (CRUS) - Get Report are down 7.44% to $35.21 in early-morning trading on Tuesday after Pacific Crest downgraded the stock to "sector weight" from "overweight."
The firm removed its $40 price target on shares of the Austin, TX-based fabless semiconductor supplier.
The ratings downgrade reflects a "much more disappointing" ramp for Apple's (AAPL) iPhone 7 in the second half of 2016 than previously expected, Pacific Crest explained.
"While feedback from Asia increases our confidence that Cirrus Logic stands to be one of the biggest beneficiaries in terms of content in the iPhone 7 related to the transition to digital headsets, we ultimately don't believe this will be enough to offset a 15% to 20% decline in iPhone 7 shipments in 2H16," Pacific Crest said.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
Cirrus' strengths such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins, notable return on equity and solid stock price performance outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: CRUS
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.