An analyst from Bank of America, Vivek Arya, has adjusted the price target for Cadence Design Systems (CDNS, Financial), bringing it down to $320 from the previous $350, while maintaining a Buy rating on the stock. This adjustment reflects ongoing uncertainty in the semiconductor sector.
According to the analyst, while the firm anticipates that U.S. chip vendors will surpass expectations in their Q1 results due to previously conservative forecasts and increased demand from tariff-related pull-ins, challenges remain ahead. The firm outlines scenarios where imposing moderate tariffs could lead to an average sales impact of 4% to 6% for the industry.
In a more severe tariff situation, the firm predicts a potential sales decline of 9% to 12% by 2025 and 2026 respectively. Moreover, these modest tariff scenarios could result in an earnings per share (EPS) reduction of 12% to 13%. Such scenarios have led the firm to adjust their targets for companies across the semiconductor sector, indicating heightened uncertainty in the market.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Cadence Design Systems Inc (CDNS, Financial) is $312.30 with a high estimate of $355.00 and a low estimate of $200.00. The average target implies an upside of 18.16% from the current price of $264.31. More detailed estimate data can be found on the Cadence Design Systems Inc (CDNS) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, Cadence Design Systems Inc's (CDNS, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Cadence Design Systems Inc (CDNS, Financial) in one year is $333.56, suggesting a upside of 26.2% from the current price of $264.31. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Cadence Design Systems Inc (CDNS) Summary page.
