UPDATE: BofA Securities Starts Cree (CREE) at Buy on Substrate Supplier Rev Streams for EV and 5G

March 1, 2021 6:06 AM EST
Get Alerts CREE Hot Sheet
Price: $88.24 -0.16%

Rating Summary:
    10 Buy, 22 Hold, 7 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 26 | Down: 9 | New: 37
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(Updated - March 1, 2021 7:38 AM EST)

BofA Securities initiates coverage on Cree (NASDAQ: CREE) with a Buy rating and a price target of $140.00 noting that the company has 60%+ share in substrates for Silicon Carbide (SiC) – the next-gen material driving efficient power conversion in battery powered EVs and charging infrastructure. Additionally, Cree’s exposure to Gallium Nitride (GaN) materials/devices provides strong growth in 5G base station and industrial markets.

The analyst stated "we forecast sales to grow at a 40%+ CAGR to $1.3bn by CY23 (from $0.5bn currently), with pf-EPS breakeven by 2H22 and l-t EPS power of $3+. We estimate every incremental 1% penetration of BEVs adds $100-$150mn in TAM (+4% in sales/pf-EPS) incremental to our CY23 model. Our $140 PO is based on 11x CY23 EV/S, slightly above comparable tech stocks with unique moats but justified given growth prospects."

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 $113.46 yesterday.

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