Shares of Cree, Inc. (CREE) gapped open sharply higher Thursday morning after Oppenheimer’s Andrew Uerkwitz upgraded the LED light products maker to ‘Outperform’ from ‘Perform’, citing the company’s ample cash hoard – $1.22 billion/mrq, vertically integrated business model, and best-in-breed technology.
Uerkwitz, who also considers Cree to be the best pure play in the LED lighting space, currently has a $59 price target on the stock. Oppenheimer‘s PT points to a potential upside of 17% from the stock’s previous close of $50.31 per share. The analyst believes that Cree is undervalued, and given its dominant LED market position, the company is poised to gain market share going forward.
As news of the upgrade made its rounds on Thursday morning, Cree shares increased sharply, hitting a 2-month high of $52.98. The current PPS values the company at about $6.5 billion.