UPDATE: Barclays Upgrades Cirrus Logic (CRUS) to Overweight; Analyst Says Apple Content Increasing, Samsung Win Possible

(Updated - December 15, 2014 1:07 PM EST)

Barclays upgraded Cirrus Logic (NASDAQ: CRUS) from Underweight to Overweight with a price target of $28.00 (from $18.00). Analyst Blayne Curtis thinks Apple (Nasdaq: AAPL) content will increase to $2.50-$3.50 from $2.00 today. He also sees opportunities for Cirrus Logic to lever the same part into the Android channel and Samsung's GS6.

"We believe CRUS will see content in the IP6S next year increasing to $2.50-3.50 (codec+amp) from ~$2.00 in the IP6," said Curtis." . . . we believe CRUS' next-gen 55nm smart codec will integrate a low power DSP to enable "always on voice." The low power DSP allows the phone to always keep one of the phone mics on and then wake the phone up if a user makes a request (i.e. you can query Siri without turning on the phone). We believe there is a roadmap beyond the DSP to provide greater processing power, as well as tie into the mic, which CRUS can also supply."

"We believe CRUS can regain share in Android next year with its smart codec as OEMs look to add "always on" capabilities - particularly Samsung. CRUS' 65nm smart codec (WM5110) is in the Note 4 and we see CRUS securing the majority of the GS6. Our checks suggest the GS6 will largely use a Samsung AP/Intel baseband (QCOM in VZ/Sprint). This is a 35-40M unit opportunity at an ASP of $2+," continued the analyst.

"Our CY14 revenue/EPS move to $790M/$2.21 (prior $788M/$2.20), CY15 moves to $935M/$1.55 (prior $852M/$1.19), and we introduce CY16 of $1054M/$2.08. Our PT moves to $28 based on 13.4x our new CY16 EPS estimate of $2.08 (vs. our prior $18 based on 15x our old CY15 EPS of $1.19)," he added.

For an analyst ratings summary and ratings history on Cirrus Logic click here. For more ratings news on Cirrus Logic click here.

Shares of Cirrus Logic closed at $18.84 yesterday.

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