UPDATE: Sterne Agee Downgrades Cree to Neutral, Lowers PT on Potential Disruption

In a report published Tuesday, Sterne Agee analyst Andrew Huang downgraded the rating on Cree CREE from Buy to Neutral, and lowered the price target from $66.00 to $59.00. In the report, Huang noted, “As a result of aggressive behavior from Philips Lighting, we believe Cree Lighting could face some disruption in the June Qtr and then more in the Sept Qtr. We are cutting our estimates, lowering our target price to $59, and downgrading to Neutral. Our checks indicate that since early this year, Philips Lighting North America has been flexing its muscles and forcing its agents to choose between Philips and Cree. We estimate that roughly half of Cree's agents carry both Cree and Philips. Our checks suggest a meaningful percentage of these agents will choose Philips Lighting (which has a product catalog one foot thick, albeit with a lot of legacy product) over Cree Lighting (which has a product catalog half an inch thick). We therefore believe Cree Lighting could face some disruption in the Jun-13 Qtr and then more in the Sep-13 Qtr.” Cree closed on Monday at $61.11.