NEW YORK (AP) -- Cree's stock climbed Tuesday as an analyst raised the energy-efficient lighting maker's rating and price target on better bulb costs and ongoing momentum in the industry.
THE SPARK: Jonathan Dorsheimer of Canaccord Genuity boosted Cree Inc. to "Buy" from "Hold" and lifted its price target to $80 from $65.
Cree is best known for LED lights and the products that go along with them.
Earlier in the day another lighting maker, Acuity Brands Inc., reported that its fiscal fourth-quarter earnings and revenue topped analysts' estimates on lower charges and continued strong demand for its LED products.
THE ANALYSIS: Dorsheimer said in a client note that it seems that Cree has managed to lower its costs for its second-generation 60 watt light bulb at Home Depot, which has improved gross margins. Meetings in Asia also suggest that Cree is working on a third-generation bulb that could lower costs even more and further boost margins, he added.
Even though there are fierce competitors, Dorsheimer said that he thinks Cree "is clearly leading the pack worldwide in the solid-state lighting revolution."
A representative for Cree, based in Durham, N.C., did not immediately respond to an email seeking comment.
SHARE ACTION: Up $6.76, or 11.2 percent, to $66.95 in afternoon trading. The stock has traded in a 52-week range of $24.50 to $76. For the year to date, the shares are up 77 percent.
