UPDATE: Piper Jaffray Reiterates Overweight Rating, Raises PT on Cree Following Positive Pre-Announcement

In a report published Wednesday, Piper Jaffray reiterated its Overweight rating on 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.