UPDATE: Bank Of America Reiterates On Cree Following Another Guidance Miss

In a report published Wednesday, Bank of America analyst Krish Sankar reiterated an Underperform rating on Cree, Inc. CREE, but lowered the price target from $30.00 to $28.00. In the report, Bank of America noted, “Cree reported 1FQ14 (Sept quarter) revenue in line with diminished expectations, but substantially lower gross margin than our forecast. As a result, non-GAAP EPS of $0.24 was well below our $0.36 estimate and Street projections at $0.34. 2FQ14 rev/non-GAAP EPS guidance of $410M/$0.22 (midpoint) also came in well below our $470M/$0.46 forecast and Street estimates of $445M/$0.38. Our estimates come down accordingly as we think low-to-mid single digit operating margins are likely the reality as the LED segment faces headwinds and lower margin lighting revenue becomes the key driver of topline growth for the foreseeable future.” Cree, Inc. closed on Tuesday at $33.15.