UPDATE: Oppenheimer Downgrades Rubicon Technology to Underperform, Names $9 PT on Multiple Risk Factors

In a report published Tuesday, Oppenheimer analyst Andrew Uerkwitz downgraded the rating on Rubicon Technology RBCN from Perform to Underperform, but named a $9.00 price target. In the report, Oppenheimer noted, “We are downgrading Rubicon to Underperform from Perform, as we believe the supply/demand dynamics are misunderstood and long-term pricing expectations are too optimistic. We believe RBCN management, despite taking all the appropriate steps, will struggle to show a profit in 2014. We are more pessimistic due to: 1) recent pricing increases are not sustainable based on our model, and 2) new demand from non-LED applications is not enough to greatly reduce overcapacity. This report details the pushes and pulls of supply and demand for sapphire. We believe the Street is missing key pieces of the puzzle—demand is overestimated and competitors may add capacity. We introduce a $9 price target, or 1X forward price/book value.” Rubicon Technology closed on Monday at $12.11.