WOLF - Why Wolfspeed Was a Howler of a Stock Today
Shares of Wolfspeed (NYSE: WOLF) ascended quickly skyward on Friday, closing the day more than 13% higher. It was little wonder; a famous investment bank upgraded the company's stock on the back of vastly improved profitability estimates.
After market hours on Thursday, Brian Lee from "white-shoe" investment bank Goldman Sachs (NYSE: GS) cranked his recommendation on Wolfspeed stock one peg higher to buy, from the previous neutral. He also adjusted his price target upward, to $108 per share.
Lee is encouraged by what he feels are notable improvements in Wolfspeed's production capacity and its execution. He believes these give the company scope to beat on both revenue projections and expected profit margins. Meanwhile, since Wolfspeed has been affected by the recent investor bearishness around tech companies in addition to its own struggles, it is now more attractively priced on a forward price-to-earnings (P/E) basis than previously.
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Why Wolfspeed Was a Howler of a Stock Today