Coherent Corp: Balancing AI Growth with Strategic Challenges – Hold Rating Maintained

William Blair analyst Jed Dorsheimer has maintained their neutral stance on COHR stock, giving a Hold rating today.

Jed Dorsheimer has given his Hold rating due to a combination of factors that reflect both positive and cautious elements in Coherent Corp’s current situation. The company is benefiting from strong demand in the AI data center sector, which has driven impressive earnings and operational improvements. However, despite these positive developments, the potential upside is tempered by Coherent’s ongoing involvement in noncore activities, which could limit immediate gains.
Additionally, while Coherent’s valuation is slightly below its peers, trading at 16 times the 2026 adjusted earnings estimate compared to the peer group’s 18 times, there remains a need for further gross margin improvement before adopting a more optimistic stance. The company’s strategic initiatives, including cost reductions and product portfolio optimization, are promising, yet the full impact of these efforts is still unfolding. Therefore, without clearer visibility on these fronts, a Hold rating is deemed appropriate.

In another report released today, B.Riley Financial also maintained a Hold rating on the stock with a $77.00 price target.