Citi analyst Amanda Scarnati added Wolfspeed Inc (NYSE:WOLF) to the firm's US Focus List - reserved for the highest conviction stocks.
"We view SiC as a key enabling technology for improved energy efficiency and the push to meet COP26 emission standards. In our view, Wolfspeed is best positioned in terms of technology and capacity to capitalize on the shift to SiC from Si and should see significant growth through 2026, with C22 and C23 poised for >40% growth," Scarnati said in a client note.
In the short term, the analyst says that comments around production starts at Mohawk and continued strength in cadence of design wins expected during the upcoming earnings call are likely to act as positive catalysts for the WOLF stock.
Moreover, the analyst is positive on WOLF as ESG investors are likely to reflect positively on shares given the company's robust exposure to power supply for EVs, charging stations, etc.
"The growth drivers within industrial markets include: 1) EV fast-charging infrastructure; 2) energy efficiency standards & operating cost reductions via less wasted electricity; 3) renewable energy market growth; and 4) smaller & lighter industrial system trends," the analyst added.
Scarnati has a $125.00 per share price target on WOLF shares, signaling an upside of about 20%.
Wolfspeed stock is up 0.7% today.
By Senad Karaahmetovic