Barclays Initiates Coverage Of LED Lighting Sector (CREE, VECO, AIXG), Piper Bearish On AIXG

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09:40:43 am on October 21, 2010

According to Barrons Barclays initiated coverage of the LED sector yesterday with ratings on Cree Inc (CREE), Veeco Instruments (VECO) and Aixtron (AIXG) which are what I’d call the top tier LED plays. 

VECO gets the highest rating at Overweight.  They like the fact the company is now an LED pure play with growth China.

===> Click Here For Your FREE Daily VECO Technical Analysis

CREE and AIXG get Equalweight ratings.  They see limited upside to shares in CREE and AIXG next year due to rich valuations.

===> Click Here For Your FREE Daily CREE Technical Analysis

While the firm sees 25% compounded growth over the next five years as LED penetrates from consumer devices to general lighting, they see considerable volatility as oversupply and high price concerns weigh.  They also indicate that rapid capacity expansion in China could add to an oversupply situation in 2011/2012. 

Piper Jaffray chimed in on AIXG yesterday as well reiterating their Underweight rating and cutting the price target slightly.  The firm sees some risk to lower demand and increasing supply and indicates that growth in the MOCVD market in China will be dependent somewhat on subsidies.

===> Click Here For Your FREE Daily AIXG Technical Analysis

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