Cautious Hold on Coherent Corp Amid Tariff Risks and Market Performance Trade-offs

Meta Marshall, an analyst from Morgan Stanley, maintained the Hold rating on Coherent Corp (COHR – Research Report). The associated price target was raised to $70.00.

Meta Marshall has given his Hold rating due to a combination of factors impacting Coherent Corp. One of the primary concerns is the risk associated with tariffs, particularly in the optical component sector, where production is difficult to relocate. Although Coherent Corp has a diversified production network, with a significant portion located in the US, there is still uncertainty about the potential impact of tariffs extending beyond China to Southeast Asia. This uncertainty warrants a cautious approach until more clarity is provided.
Additionally, while the company has shown strength in its datacom and telecom sectors, there is a trade-off with weaker performance in industrial markets, which typically yield higher margins in the second half of the calendar year. The upcoming Analyst Day is expected to provide more insights into the company’s path to achieving 40% gross margins and enhancing long-term earnings as it reduces leverage. Until then, the recommendation remains neutral, awaiting further details that could influence a more positive outlook.

According to TipRanks, Marshall is a 4-star analyst with an average return of 6.0% and a 56.49% success rate. Marshall covers the Technology sector, focusing on stocks such as Arista Networks, Five9, and Keysight Technologies.