Canaccord Cuts Price Target for Cree, Inc. (CREE) Following Disappointing Q3 Pre-Announcement
Shareholders of Cree, Inc. (NASDAQ:CREE) are having a rough day as the company’s stock is down by 15%, after the lighting maker negatively pre-announced its third-quarter results with revenue guided to be approximately $367 million, compared to prior guidance range of $400 and $430 million.
In reaction, Canaccord analyst Jonathan Dorsheimer reiterated a Hold rating on shares of Cree, while reducing the price target to $20 (from $24), which represents a potential downside of 19% from where the stock is currently trading.
Dorsheimer noted, “Cree’s Q3 pre-announcement will swing all attention to the company’s near-term weakness in its Lighting business. The Lighting business was and is Cree’s growth driver, which makes the miss all that more painful, particularly after the recent LED products impairment. While Cree suggests the disruption is in part from market weakness, we note CREE lacks an agent distribution channel, which we believe could be exacerbating the shortfall. What keeps us on the sidelines though is the fact CREE is not seeing the pressures we have eluded to in the LED Products business, which may suggest further downside. As such, we are lowering our PT to $20 to account for the risks.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jonathan Dorsheimer has a yearly average return of -5.6% and a 39% success rate. Dorsheimer has a -17.9% average return when recommending CREE, and is ranked #3522 out of 3835 analysts.
Out of the 12 analysts polled by TipRanks, 3 rate Cree stock a Buy, 8 rate the stock a Hold and 1 recommends a Sell. With a return potential of 16%, the stock’s consensus target price stands at $28.61.