logo
  Join        Login             Stock Quote

Cree (CREE) Downgraded To 'Perform' By Oppenheimer On Valuation

 February 19, 2013 01:38 PM
 


(By Balachander) Cree Inc. (NASDAQ: CREE) shares were downgraded to "perform" from "outperform" by Oppenheimer based on valuation.

The brokerage, which removed price target of $42 on the stock, believes now is a good time to take money off the table.

"CREE currently trades at a 35x forward P/E multiple, a two-year high. Although we believe in the technology advantage of CREE and the long-term growth prospects of the LED lighting market, the near term may not be "all clear" to support such lofty valuation," Oppenheimer said.

The brokerage believes the stock could continue to rally over the next 3-6 months as immediate headwinds seem overblown, China orders pick up following the New Year, and spring ushers in more favorable weather for municipal and new commercial lighting.

[Related -Cree, Inc. (CREE) Q2 Earnings Preview: What To Expect?]

"However, visibility remains limited and longer term competitive dynamics linger; to us, risk/reward looks balanced," Oppenheimer said.

"Cree is still our favorite name in the LED supply chain, but valuation prompts us to take a more conservative stance and wait for a better entry point," the brokerage wrote.

CREE's shift to a fixture business, and its component business fighting the commodity bug, each present unique challenges over the long haul. The brokerage sees CREE as ultimately being successful, but also don't see the risk these challenges present priced into the stock.

CREE shares fell 0.39 percent to trade at $45.54 on Tuesday. Over the past year, the stock has been trading between $22.25 and $46.88.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageThe Soda Industry Is Dying - But PepsiCo Will Thrive

Although diet crazes come and go, one trend has become clear: Americans are drinking less soda. Per-capita read on...

article imageDefensive Sectors Lead Hesitant Market, But Traders Honor Long-standing Bullish Support

Last week, the major indexes fell back below round-number thresholds that had taken a lot of effort to read on...

article imageWill Janet Yellen's Outlook Prevail?

Federal Reserve Chairwoman Janet Yellen told the crowd last week that rate hikes are coming. The rise will read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.