Shares of LED stocks are under pressure this morning after Needham downgraded both Veeco Instruments (VECO) and Rubicon Technology (RBCN) due to slowing demand and over capacity. That’s essentially the same analysis analysts have made for solar stocks which have mirrored the performance of LED stocks. It should be noted that both green sectors are emerging from the dead and are greatly improved technically. I mentioned solar stocks bottomed out a few weeks ago and seeing signs that LED stocks may be bottoming out as well as they have now taken out resistance of the 50 day moving averages and now returning to what is now support of those levels.
Anyway, on to the downgrades as highlighted by Forbes. I’ll summarize here.
Veeco: cut from Buy to Hold with price target reduction from $34 to $25 (about where it trades now). They believe the recent run in the stock limits near term potential and that a slow down in demand may be more prolonged than first thought.
The Rubicon notes are nearly identical, but it’s getting hit the hardest today most likely due to the fact it’s most reliant on the LED market while Veeco is better diversified.