Cree upgrade details -- to Outperform at Oppenheimer; tgt $59 -- best LT play in LED space
Oppenheimer upgrades CREE to Outperform from Perform and sets target price at $59; they view CREE as the best pure play to benefit from the secular trend of LED lighting adoption. They like CREE's operating leverage, technology leadership, and disciplined and focused mgmt. Meanwhile, the pricing environment in the LED industry has moderated due to improving supply-demand balance. Additionally, CREE's vertically integrated model and substantial cash position should benefit from accelerating industry consolidation. They believe the stock is undervalued due to near-term margin concerns and weak commercial market growth.