JP Morgan analysts recommend Cree

Posted by David Ranii on December 30, 2013 

Analysts at J.P. Morgan expect Cree to be one of the companies that benefit from accelerated adoption of LED lights in 2014.

Durham-based Cree “has established a sustainable competitive advantage in the fast-growing LED industry,” the analysts wrote in a research note on LED lighting issued earlier this month.

The firm rates Cree overweight, the equivalent of a buy, and set a 12-month target price for its shares of $75.

Cree shares closed Tuesday at $62.52, up 98 cents cents. Its shares rose 88 percent in 2013.

J.P. Morgan projects Cree’s earnings per share will rise 29 percent in the 2014 calendar year, while revenue will rise at least 18 percent.

In March, Cree unveiled an LED bulb sold exclusively at Home Depot that’s the equivalent of a 40-watt incandescent bulb and retails for $9.97. That move “created strong retail brand momentum in the United States that can translate into pricing and margin advantages across the firm’s broader lighting product line-up for commercial and industrial applications,” the analysts wrote.

Rapidly declining prices of LED bulbs are expected to spur adoption of solid-state lighting, which today is a small piece of the overall lighting market.

“Though many investors generally believe the LED growth-phase itself will be over within five years, we think this view overlooks the potential for LEDs to spur adoption of lighting in new applications,” according to the analysts.

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service