It’s time to buy shares of Wolfspeed , according to JPMorgan. Analyst Samik Chatterjee upgraded shares of Wolfspeed to overweight from neutral heading into a key investor day on Oct. 31 that will likely prove the “capacity ramp key to delivering on the bull thesis on the shares.” “From the upcoming investor day, we expect a mixed bag in terms of financials, with raises in revenue guides for FY24 & FY26; although, accompanied by moderation to gross margin targets as well as a significant raise to the capex trajectory to fund the new Materials and yet to be announced Devices facility,” Chatterjee wrote in a Monday note. “However, when it comes to investor focus and critical drivers of the investment case, we expect the revenue upside and ramp of MVP being in line to better has more permanent implications in relation to separating WOLF from the peer group, which has made capacity announcements in a hurry in recent times in a bid to catch up to WOLF,” Chatterjee continued. The stock popped 3.2% in the premarket. Shares of Wolfspeed outperformed this year, down only 5.4%, as investors expect greater adoption of its silicon carbide semiconductors as demand for electric vehicles grow. Electric vehicle production is supposed to ramp up at a more than 20% compounded annual growth rate, according to the note. Meanwhile, Wolfspeed’s investor day could show whether the company can meet that demand through its Mohawk Valley facility. The analyst raised his price target on the stock to $160 from $130. The new price target represents upside of 51.3% from Friday’s close of $105.77. “We forecast a +30% revenue CAR through to FY30, achieving $6 bn of revenue (including the yet to be announced second greenfield Devices facility) and $10 of EPS at the end of the decade, setting up shares for sizeable gains,” the note read. —CNBC’s Michael Bloom contributed to this report.
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