J.P. Morgan Overweight On Cree

J.P. Morgan Chase & Co. is out with a research report on Cree CREE and has an Overweight rating and a $48 price target on shares. In a note to clients, J.P. Morgan Chase & Co. writes, "We believe that despite paying approx 2.5x Ruud's expected F12 sales & depleting a large portion of their cash, Cree made a good strategic move in acquiring Ruud Lighting. Cree should be able to leverage Ruud's position as an early market leader for LED-based outdoor lights & should benefit from the addition of Ruud's sales & dist channels to its own, which more than doubles the overall size of this effort & allows both sets of products, Cree Lighting & Ruud Lighting, to be sold across both sales forces. The N. American commercial dist network for lighting products is highly fractured and we believe the addition of the well established Ruud channel is a powerful lever in accelerating demand growth of the indoor LED lighting products that Cree has developed. Overall we think this acquisition strengthens Cree's position in the area of LED based lighting & will allow it to accelerate its revenue/EPS growth faster than would have occurred otherwise. We are increasing our C11 ests to $1.1bn/$0.95 & reiterating our OW Rating on CREE." Shares of CREE lost $3.49 yesterday to close at $31.25.