Wunderlich Lowers Earnings And Target On Cree

In a report published by Wunderlich, it is lowering earnings and target on Cree (NASDAQ: CREE).

Wunderlich said that Cree preannounced lower-than-consensus revenue and gross profit margins for fiscal 3Q11 and 4Q11 with implications for fiscal 2012. “The issue is that it has had to reduce prices more aggressively in order to move previously disclosed excess inventory in the channel. We have lowered our estimates and our price target to $80 from $85 to reflect the change in earnings. We maintain our Buy rating. Although CREE management on the conference call said its distributors are taking less inventory, this may be a problem that isn't CREE-specific at all.”

Cree closed yesterday at $49.00.