Maxim Group Reiterates Buy Rating, $38 PT on Cree

In a report published Wednesday, Maxim Group reiterated its Buy rating and $38.00 price target on Cree (NASDAQ: CREE).

Maxim Group noted, “In the face of revenue growth/margin concerns, CREE's FY4Q12 results and FY1Q13 guidance, in our view, set the stage for a recovery in FY13 with LED Lighting sales gaining momentum and gross margins on the rise. While we lower our FY13-FY14 estimates assuming gross margins stay <38%, we expect leverage from 18%-19% revenue growth to yield GAAP EPS of $0.80 in FY13 and $1.26 in FY14. With CREE trading at a 4% FCF yield, and at only 16x our FY14 estimate x-$6.40 in cash, we maintain our Buy rating.”

Cree closed on Tuesday at $26.34.

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