Canaccord Adams Upgrades Rubicon Technology (RBCN) to Buy, Doubles Price Target
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Mid-day Canaccord Adams upgrades Rubicon Technology, Inc. (Nasdaq: RBCN) from Hold to Buy, and doubled their price target from $11 to $22. The firm cited improving macro supply/demand.
Analyst Jonathan Dorsheimer commented, "we feel tight supply/demand dynamics will result in a better-than-expected Q3 and improved pricing could lead to upside over the coming quarters. Further, our longer-term view of a tight sapphire market leads us to believe that Rubicon will need to expand capacity."
Dorsheimer said sources in the supply chain have indicated that pricing has finally stabilized and could increase as much as 40-50% in the coming quarters as demand outpaces supply.
Dorsheimer also said the quarter is tracking well, with with factory utilization likely over 80% from a prior 60% exiting last quarter. This could trends near 100%, which could lead to a capacity expansion that would potentially improve leverage and earnings power.
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