Analyst War Breaks Out over Cree and LED Recovery

Wall St. analyst calls very frequently are directional. In short, they tend to upgrade or downgrade stocks in the same manner because they theoretically have access to the same information. That is not the case with LED light leader Cree Inc. (NASDAQ: CREE) on Wednesday. Multiple firms are making different research calls after the company’s earnings report and after its shares have risen so much.

Cree said that its third-quarter profit rose more than 100% on strong lighting sales, but the stock is lower based on sales coming in light (no pun intended). This is becoming a duel between being in value stocks and turnaround stocks.

You will see an analyst war below and how this is affecting Cree and other LED stock rivals:

  • Needham & Co. raised its price target to $63 from $60 after the report.
  • Stern Agee maintained a Buy rating but raised its estimates due to momentum in Cree’s lighting products sales. This firm raised its price target to $66 from $64 on Wednesday morning.
  • Canaccord Genuity said that it has no changes from Cree and has maintained its Hold rating along with its $49 price target.
  • Gabelli & Co. took the other end of the spectrum and downgraded Cree to Hold from Buy, now that shares have risen so much from the lows of 2012.
  • Another firm, called Northland Securities, maintained its Outperform rating and raised its price target to $63 from $50.

Investors need to recall that Cree just recently hit a 52-week high right before its earnings, and that the stock is up more than 150% from its 2012 low. This morning we see Cree trading down more than 7% at about $53.25 in active trading, against a 52-week range of $22.25 to $58.00.

Veeco Instruments Inc. (NASDAQ: VECO) also competes in the LED space, and this one is down more than 1% at $36.98 in thin volume trading right after the open. The stock closed at $37.51 on Tuesday, and the 52-week range is $26.15 to $40.34.

Aixtron SE (NASDAQ: AIXG) is the European player here in the LED sector, and its shares have been very volatile and have not recovered the same as Cree. Aixtron ADRs are down close to 1%, at $13.68 against a 52-week range of $11.21 to $19.16.

Rubicon Technology Inc. (NASDAQ: RBCN) is another player we like to feature despite its market cap being only $141 million. Analysts have called on this one to double in share price in recent calls. Rubicon shares are down more than 2% at $6.27 so far.

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