December 2, 1999
Credit Suisse Ups Cadence Design Sys To Buy From Hold
NEW YORK --Credit Suisse First Boston increased its investment recommendation on Cadence Designs Systems Inc. (CDN) to 'buy' from 'hold,' citing a "steady fundamental turnaround" for the provider of electronic design automation software and services.
In a research note Thursday, analyst Erach Desai wrote he thinks Cadence Designs' fourth quarter is "off to a strong start;" its "multi-quarter licensing transition (is) on track."
He believes the company can "return to a healthy operating model" during 2001. He raised his per-share earnings estimate for 2001 to 85 cents from 75 cents.
As a result, he raised his 12-month price target to $26, and wrote "we would be aggressive buyers below $20" a share.
However, in the near term, Cadence Designs will face some challenges in the next two to three quarters with new product traction and services execution, according to Desai.
Shares of Cadence Designs recently traded at 18 1/2, up 7/8, or 5%, on composite volume of 1.6 million shares, compared with average daily volume of 1.3 million shares.
-By Beth M. Mantz
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