Citi raises Cadence Design Systems price target to $420

Citi analyst Kelsey Chia raised the price target on Cadence Design Systems (NASDAQ: CDNS) to $420 from $400, while maintaining a Buy rating, according to a analyst note.

The revision follows Cadence's latest quarterly results, in which the company raised its fiscal year 2026 revenue guidance by $125M to $6.30B, representing 19% year-over-year growth. Chia described this as the company's largest upward guidance revision since 2023.

Chia cited strong IP growth from hyperscaler chip design activity and record EDA hardware growth as drivers of the guidance increase. The company reported a record backlog of $8.1B, up 27% year-over-year.

Citi raised its CY26 and CY27 earnings per share estimates by 2% and 1%, respectively. The updated $420 price target is based on a 42x CY27 EPS multiple, which Chia noted is roughly in line with the stock's five-year trading range.

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