In a report published Wednesday, Piper Jaffray reiterated its Overweight rating on Cree CREE, and raised its price target from $43.00 to $57.00.
Piper Jaffray noted, “We are raising our PT to $57 ($43 previously) on the heels of a positive pre-announcement (midpoint of revenue guide up $7m and EPS by a penny), but more importantly on the ramification of the sub $10 LED bulb launch which we believe breaks a key barrier in terms of adoption mindshare and provides a compelling payback of ~1 year. With the company signing up Home Depot as an exclusive house that would carry these brands, we see revenues from this incremental opportunity to range from $194m-$272m at 10% adoption which we view as conservative. As this new product roll out (Sub $10 bulb) happens, it enables improved factory absorption for CREE while lending support to gross margins which we see growing to 43% by YE14. Introducing CY14 estimates. Our $57 PT is based on 22x CY14 EPS of $2.25 + $7.47 in net cash/share.”
Cree closed on Tuesday at $51.16.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in