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- Wolfspeed (NYSE:WOLF) shares rose more than 3.5% in early trading on Thursday, even as Canaccord Genuity cut its price target on the semiconductor company, citing operational worries.
- “Operational stabilization is crucial in the near term to restore investor confidence and demonstrate that the period of significant cash burn is ending,” analyst George Gianarikas wrote in an investor note. “The company has made commendable progress in improving its 200mm operations, enhancing performance and utilization ahead of schedule. However, persistent negative earnings revisions, stemming from various factors like I&E weakness, RF challenges, and equipment issues, have eroded market confidence.”
- Gianarikas kept his Buy rating on the stock but lowered his price target to $25 from $45.
- Gianarikas said that if Wolfspeed were to secure CHIPs Act funding, it would be “immensely helpful” to the company, but it could survive without it. However, the Durham, N.C.-based company has to provide “concrete evidence” that the company has turned around, and its capital plan is sufficient.
- “We would encourage management to clearly communicate their plan with numbers and data,” Gianarikas added.
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