Goldman Sees Catalysts for Cree (CREE); 'Co. Navigated Q2 Well'

January 22, 2014 9:08 AM EST
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Price: $28.05 +1.56%

Rating Summary:
    12 Buy, 23 Hold, 5 Sell

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    Up: 30 | Down: 30 | New: 23
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Goldman Sachs maintained a Buy rating on Cree (NASDAQ: CREE) with a price target of $72.00. Comments follow Q2 results.

Analyst Brian Lee said, "While investor concerns around seasonality and margins were running high into the quarter, we believe Cree navigated well, as: (1) growth in LED lighting (+42% yoy) continues to show the adoption curve is in the early innings; (2) March quarter guidance implies a return to 30%+ gross margin in lighting after several disappointing quarters, plus flat to slightly up overall margins despite lower revenue and higher lighting mix; and (3) share in LED bulbs is high with sell-through at Home Depot doubling qoq."

"More importantly, we believe solid execution against a tricky backdrop to start 2014 positions Cree for a potentially break-out June, where a combination of seasonal strength in LED demand, a bounce-back in outdoor lighting, consumer bulb re-stock and likely Home Depot extension could create a slew of potential upside catalysts," he added.

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

Shares of Cree closed at $62.83 yesterday.

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