In a report published Tuesday, Deutsche Bank maintained its Hold rating on Cree CREE and
increases price target from $36 to $41.
Deutsche Bank reported that, “We think this is a very strong growth opportunity for CREE. In 2012, US
consumers purchased over 4 billion lightbulbs (of which a majority were 40 or 60-watts). We believe this represents over a $14 billion revenue opportunity (assuming 50% price to the company from retail prices and 60% penetration)
as the company expects to initially focus on the N. American market before expanding globally. We should expect to see higher revenue contribution in 2014; as of Jan 2014, the new phaseout of incandescent bulbs will apply to 60
and 40 watt bulbs as well. *Please see next page for further thoughts on of the announcement and impact to 2013 and 2014 estimates."
Cree's shares closed at about $44.72 on Monday.
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