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UPDATE: Summit Downgrades Cree, Inc. to Hold

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In a report published Wednesday morning, Summit Research's Srini Sundararajan downgraded Cree, Inc. (Nasdaq: CREE) from Buy to Hold with a price target of $40.

Sundararajan cited the company's inability to create impressive gross margins. He pointed out gross margins are the means by which the market evaluates a company. As the gross margin for a sector of the corporation growing at 42.7% FY14/FY13 is under 30% (and other sectors don't sufficiently supplement it), the GM falls below expectations and thus lead to a negative evaluation.

In regards to the future, the report stated, “We are still assuming 21.4% revenue growth in FY15, going from our F2014E $1648M to FY2015 $2000M. Downside risks would be reduced LED adoption in lighting worldwide for any reason, use of mid-power LEDs to do the job of high quality LEDs, and upside might continue from the phasing out of incandescents in multiple countries”.

Latest Ratings for CREE

DateFirmActionFromTo
May 2016Pacific CrestInitiates Coverage onSector Perform
Apr 2016Cowen & CompanyMaintainsMarket Perform
Feb 2016Piper JaffrayUpgradesNeutralOverweight

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Posted-In: Analyst Color News Downgrades Price Target Analyst Ratings

 

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