Morgan Joseph Downgrades Cree Inc (CREE) On Valuation, But Raises Estimates

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10:02:05 am on January 14, 2010

Cree Inc (CREE) is holding up quite well despite a downgrade this morning from Morgan Joseph.  The stock has been on a torrid run this year, so it’s not unusual for a few valuation downgrades to be issued.  The firm downgraded CREE from Buy to Hold but raised estimates for this year and next.  Hat tip to Street Insider for the following analyst comments.

“On Tuesday after the close of trading, we expect Cree to announce F2Q10 sales and non-GAAP EPS of $186mm and $0.29, respectively, essentially inline with Street expectations of approximately $187mm and $0.29, respectively. We expect LED sales to continue driving revenue growth for Cree, with strong demand for indoor and outdoor lighting solutions. We believe the company has hit an inflection point with global opportunities and that the potential in the LED lighting and fixtures market is significant. The largely indirect impact of the stimulus thus far is likely to continue, in our view, by raising awareness on LED lighting and Cree’s business. Given our belief that the adoption of LED lighting and fixtures is likely to drive Cree’s revenue higher than our previous estimates reflect, we are raising our CY2010 estimates to $827mm and $1.25, from $817mm and $1.20, respectively. We are also increasing our CY2011 estimates to $1.08bn and $1.75, from $985mm and $1.50. Our expectations for CY2009 remain the same.”

::: >>> Click Here For Your FREE Cree Analysis

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