Craig-Hallum downgrades Emcore to Hold, lowers price target to $2

As previously reported, Craig-Hallum downgraded Emcore to Hold from Buy with a price target of $2, down from $10. The firm says it has held out for a few quarters waiting for the promise of a pure-play INS business that could drive growth and profitability, but “that hope has been dashed” with a considerably lower sales outlook, challenged balance sheet and CEO resignation. Craig-Hallum notes that with the stock possibly opening up in the $2 range, the stock would have a negative EV, which is incredibly cheap in most situations. But with all of the change ongoing at the company, including leadership, that creates far too much uncertainty, the firm is going to go the sidelines while it waits for stability.