Cree Stock Keeps Crumbling on Bear Note

The analyst also slashed its CREE target price to $38

Deputy Editor
Aug 26, 2019 at 9:46 AM
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Lighting manufacturer Cree, Inc. (NASDAQ:CREE) is sinking today, after Piper Jaffray issued a bear note. The analyst downgraded the stock to "underweight" from "neutral," and slashed its price target to $38 from $57, citing the firm's quarterly guidance due to the recent Huawei ban. The stock has lost 2.6% so far to trade at $45.90. 

If this negative price action holds through the close, today could mark the equity's sixth straight loss, as well as its lowest close since January. CREE took a major blow last week, finishing with a 19.9% weekly drop, its worst in roughly six years. Despite this dip, however, the security is still nearly 10% higher year-to-date.

CREE is no stranger to negative analyst attention, with seven brokerages in coverage calling it a "hold' or worse, compared to only two saying the equity is a "strong buy." The consensus 12-month target price of $55.88, though, is at a 21.2% premium to last Friday's close. 

Pessimism has pervaded the options pits, too. On the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CREE sports a 10-day put/call volume ratio of 2.17, which suggests that puts have more than doubled calls during the past two weeks. What's more, this ratio sits higher than all but 1% of readings from the past year, indicating a much healthier appetite for bearish bets over bullish of late.    

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