UPDATE: Dougherty & Co Downgrades GT Advanced Tech (GTAT) to Sell; Guidance Needs to Get Cut in Half, Says Analyst

(Updated - September 10, 2014 11:59 AM EDT)

Dougherty & Co downgraded GT Advanced Tech (NASDAQ: GTAT) from Buy to Sell with a price target of $9 (from $29).

" . . . given the lack of new-term visibility due to the Apple situation, we are changing our rating to a Sell from Buy and lowering our price target to $9.00 from $29.00," said analyst Pierre Maccagno. "This is extremely negative news for GTAT since the MESA fab has been built with a sapphire capacity to support sapphire faceplates for about 90 million smartphones per year according to our estimates."

"The volume of sapphire required for the Apple Watch is about 3% of our previous expectations. Based on a rough estimate that about 20% of Apple customers, equal to about 36 million per year, will buy an “Apple Watch” and that the size of the faceplate for the “Apple Watch” is about 1/6th to 1/7th the area of the faceplate for a smartphone, the volume of sapphire required for the “Apple Watch” is about 3% of that required for the iPhone," he added. "Previous guidance given by management for 2014 needs to be cut in half. Our original estimate under the assumption that sapphire was to be used in one of the models of the iPhone was for sapphire material sales to ramp to $130MM in 3Q 14."

For an analyst ratings summary and ratings history on GT Advanced Tech click here. For more ratings news on GT Advanced Tech click here.

Shares of GT Advanced Tech closed at $14.94 yesterday.

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