Will This Analyst Downgrade Hurt Xilinx (XLNX) Stock Today? (Update)

Update (9:52 a.m.): Updated with Thursday market open information.

NEW YORK (TheStreet) -- Credit Suisse downgraded Xilinx  (XLNX) to "neutral" from "outperform" and set a $50 price target. The firm believes the company may struggle to achieve guidance. 

The stock was down 8.78% to $47.82 at 9:50 a.m. on Thursday.

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Separately, TheStreet Ratings team rates XILINX INC as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate XILINX INC (XLNX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, notable return on equity, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 1.5%. Since the same quarter one year prior, revenues rose by 15.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 60.52% and other important driving factors, this stock has surged by 38.70% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, XLNX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, XILINX INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for XILINX INC is currently very high, coming in at 71.51%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.97% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 76.54% to $216.39 million when compared to the same quarter last year. In addition, XILINX INC has also vastly surpassed the industry average cash flow growth rate of -71.56%.
  • You can view the full analysis from the report here: XLNX Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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