This semiconductor industry supplier is forecasted to grow at an annual rate of 115.28% over the next five years.
Cree, Inc. (CREE)
From Canaccord Genuity Research
In the midst of investor angst over Huawei, a customer with less than 5% exposure, it is as if investors have ignored Cree, Inc.’s (CREE) VW announcement. Cree has signed VW as an exclusive supplier of SiC (silicon carbide) to the FAST (Future Automotive Supply Tracks) initiative. This opens up over 70 platforms at VW over the next decade, or 22 million EVs.
While we don’t discount the risk from the US/China trade tensions and its potential to escalate, at present, Huawei remains a limited risk, in our opinion, with less than 5% revenue exposure.
We continue to see Cree as the best-positioned company within the revolutionary SiC marketplace and believe that the recent capacity expansion announced by the company will solidify the leadership position that Cree currently enjoys. We view VW’s FAST program and supplier announcement as further confirming evidence of our SiC hypothesis.
We maintain our BUY rating and $78 PT, which is based upon SoTP (sum-of the-parts) analysis.
Jed Dorsheimer, Canaccord Genuity Research, www.canaccordgenuity.com, May 21, 2019