UPDATE: Goldman Sachs Upgrades Wolfspeed (WOLF) to Buy 'ahead of a significant EPS inflection'

(Updated - June 23, 2022 4:51 PM EDT)

Goldman Sachs analyst Brian Lee upgraded Wolfspeed (NYSE: WOLF) from Neutral to Buy with a price target of $108.00.

The analyst comments "We upgrade shares of WOLF to Buy, with our revised 12-mo target of $108 implying 73% upside as of 6/21/22. While WOLF's growth story tied to EVs is likely well appreciated by investors given the company's ongoing investment and backlog growth in this space over the past couple of years, the stock has given back a significant amount of the momentum trade, in our view. Looking ahead, we're tactically more bullish given (i) the most significant EPS inflection in the company's history is now a near-to-medium term event, (ii) improved execution and maturing ramp-up of new capacity sets the pace for potential topline/margin beats and (iii) the entry point is more attractive than it's been in some time with potential for EPS power of >$3 in FY25 implying <20X P/E vs. prior growth upcycles for WOLF averaging 30X-40X. Additionally, while investor concern around new capex has heightened, of late, our analysis suggests ROI on incremental capex is attractive and we believe any increase in capex would be accompanied by increased growth and/or long-term financial targets, another potential positive catalyst."

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

Shares of Wolfspeed closed at $61.85 yesterday.

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