UBS Warburg downgraded Cree (CREE ) to reduce.
Analyst Alex Gauna says he has concerns that Cree's current valuation does not reflect the risk/reward inherent to the company's market position. Guana says Cree is in the midst of two sequential quarters of growth deceleration as it moves through the sweet spot of the holiday build cycle for handsets, and into a seasonally soft March quarter. He says risk factors that could negatively impact the company's valuation over the next six months include next-generation handsets experiencing a lower seasonal sell through, excessive Asian LED capacity to come on line, yield issues as Cree produces its more complex X-Bright technology. Guana is keeping his 26-cent fiscal 2003 (June) earnings per share estimate.