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Investing.com - Mizuho (NYSE:MFG) has raised its price target on Cadence Design Systems (NASDAQ:CDNS) to $360.00 from $325.00 while maintaining an Outperform rating ahead of the company’s second-quarter earnings report. The new target represents potential upside from the current price of $316.32, with the stock trading near its 52-week high of $330.09.
The price target increase comes despite Mizuho’s expectation that Cadence will face a temporary China headwind of approximately $56 million in the second quarter due to recent Bureau of Industry and Security (BIS) export restrictions.
Mizuho believes this China-related overhang has now been lifted and expects China revenue to normalize, with the broader business remaining healthy, supported by strength in intellectual property and the hardware refresh cycle.
The firm anticipates Cadence will resume its normal pattern of beating expectations and raising guidance starting in the third quarter, with secular growth drivers, especially around artificial intelligence, remaining intact. According to InvestingPro, the company maintains a GOOD financial health score, with 15+ additional exclusive insights available for subscribers.
Cadence Design Systems is scheduled to report its second-quarter financial results on July 28, after market close. Analysts’ price targets currently range from $200 to $380, reflecting varied opinions on the stock’s valuation at its current P/E ratio of 79.5x.
In other recent news, Cadence Design Systems has been in the spotlight with several key developments. The company has seen its stock price target raised by Loop Capital to $370, maintaining a Buy rating, while KeyBanc Capital Markets also increased its target to $358, citing reduced risks related to China. Goldman Sachs initiated coverage on Cadence with a Buy rating, highlighting its growth outlook and setting a price target of $380. These adjustments come amid the U.S. Bureau of Industry and Security rescinding export license requirements for Cadence’s electronic design automation software when dealing with China. This regulatory change could impact the company’s operations and financial performance. Additionally, Cadence has announced the industry’s first LPDDR6/5X memory IP system solution, designed to meet the demands of AI and high-performance computing. The company is currently engaged with leading AI, high-performance computing, and data center customers. These developments reflect Cadence’s ongoing efforts to navigate regulatory challenges and innovate within the semiconductor industry.
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