UPDATE: Deutsche Bank Maintains Cree at Hold and Increases PT to $41/share on New Key Product; Revised Outlook

In a report published Tuesday, Deutsche Bank maintained its Hold rating on Cree CREE and increases price target from $36 to $41. Deutsche Bank reported that, “We think this is a very strong growth opportunity for CREE. In 2012, US consumers purchased over 4 billion lightbulbs (of which a majority were 40 or 60-watts). We believe this represents over a $14 billion revenue opportunity (assuming 50% price to the company from retail prices and 60% penetration) as the company expects to initially focus on the N. American market before expanding globally. We should expect to see higher revenue contribution in 2014; as of Jan 2014, the new phaseout of incandescent bulbs will apply to 60 and 40 watt bulbs as well. *Please see next page for further thoughts on of the announcement and impact to 2013 and 2014 estimates." Cree's shares closed at about $44.72 on Monday.