01:09 PM EDT, 06/25/2024 (MT Newswires) -- Wolfspeed's ( WOLF ) operational updates that it announced Monday had more downsides than upsides, Morgan Stanley said Tuesday in a note.

The semiconductor manufacturer's update on its Mohawk Valley silicon carbide fabrication was a positive for Morgan Stanley. Wolfspeed ( WOLF ) has reached 20% wafer start utilization at the fab and is on its way to reaching 25% utilization by the end of calendar year 2024.

On the downside, the firm said an equipment incident at the company's Durham facility led to a temporary capacity reduction with anticipated return to previously targeted levels by August.

The company has guided of a potential negative impact to its revenue for the September quarter of about $20 million due to the equipment incident.

The firm cut Wolfspeed's ( WOLF ) price target to $23 from $26 with an equalweight rating.

Wolfspeed ( WOLF ) shares were down 4% in recent trading.

Price: 22.05, Change: -0.90, Percent Change: -3.92