CREE - Cree shares drop as JPMorgan turns bearish on 'rich' valuation after earnings

Citing the mixed Q3 results and "rich" valuation, J.P. Morgan downgrades Cree (CREE) from Neutral to Underweight and maintains a $108 price target.Analyst Paul Coster writes that the in-line results and mixed Q4 guidance "leave the narrative unchanged but the stock looking richly-valued" having surpassed the firm's price target.Coster notes that gross margin improvement has "stalled" in calendar 2021, which could weigh on the stock near-term due to the elevated multiples.CREE shares are down 6% pre-market to $106.Background: Yesterday, Cree reported fiscal Q3 results that beat revenue estimates but met on profit.

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Cree shares drop as JPMorgan turns bearish on 'rich' valuation after earnings