Cree: We Expect The Stock To Be Volatile On Weak LED Chip Volumes, Says Wedbush

In a research note released today, Wedbush analyst Craig Irwin maintained an Outperform rating on Cree (CREE), and reduced his price target to $61 (from $63), following mixed 4Q14 results with major improvement in LED Lighting fixtures, offset by deterioration in LED Chips & Components.

Irwin commented: “We expect the stock to be volatile on weak LED Chip volumes, but remain constructive on positive margin performance in spite of headwinds. Gross margin deltas usually drive the most significant changes to Cree’s valuation and we see the positive performance as constructive. Although there will be volatility on the reset in LED chip volume expectations, we believe downside is fairly well protected around 2x book or the $49 level, given historical trading ranges, strong 100%+ growth in LED fixtures markets, and the broadly improving industry outlook. We continue to expect the LED capacity cycle to benefit near-term performance.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Craig Irwin has a total average return of 1.8% and a 44.1% success rate. Irwin has a -24.1% average return when recommending CREE, and is ranked #1702 out of 3242 analysts.

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