Cypress Semiconductor Stock Downgraded on Near-Term NOR Risk

The analyst expressed concerns over the chip company's margins

Managing Editor
Sep 25, 2018 at 10:00 AM
facebook X logo linkedin

Cypress Semiconductor Corporation (NASDAQ:CY) stock is 6.1% lower to trade at $14.57 this morning, after KeyBanc downgraded the chip name to "sector weight" from "overweight." The analyst in coverage sees near-term risk with the company's gross margin targets, attributable to a drop in NOR pricing and a slowdown in the global automotive market. Longer term, though, they waxed optimistic on the company's auto and industrial businesses, as well as its internet of things (IoT) integration. 

While most chip stocks struggled last week, CY turned in a 2.5% weekly win. Those gains have now been erased, with the equity tumbling 2.8% yesterday thanks to a price-target cut to $13 from Morgan Stanley. Plus, today's drop takes the stock back below its year-to-date breakeven level. It's been a choppy year for CY shares overall, with their 30-day moving average emerging as resistance in the last month. 

Analysts for the most part remain upbeat on the semiconductor name. Of the 14 brokerages covering CY, nine rate it a "strong buy," with only one "strong sell" on the books. Further, the security's consensus 12-month price target of $20.35 is a 40% premium to current trading levels. 

Options traders, meanwhile, are growing increasingly skeptical. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CY's 10-day put/call volume ratio of 0.34 ranks in the 88th percentile of its annual range. While this shows call buying has topped put buying on an absolute basis, the reading's high percentile ranking indicates the rate of put buying relative to call buying is quite unusual.

Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.61 ranks in the 99th percentile of its annual range. This shows that short-term traders have rarely been more put-heavy toward the security in the past year.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI