Coherent Corp: Balancing Growth Prospects and Market Challenges with a Hold Rating

Meta Marshall, an analyst from Morgan Stanley, maintained the Hold rating on Coherent Corp (COHR – Research Report). The associated price target was raised to $74.00.

Meta Marshall has given his Hold rating due to a combination of factors related to Coherent Corp’s current market position and future prospects. The company is expected to outline a plan to achieve approximately $6 in earnings by fiscal year 2028, driven by steady growth in the datacomm and networking sectors. This positive outlook is anticipated to slightly elevate market estimates, potentially acting as a catalyst for the stock. However, the recent significant stock price increase of over 40% in the past month already reflects much of this optimism.
Despite the potential for growth, Coherent Corp faces challenges such as maintaining gross margins above 40% amid tariff risks and the need for improvements in other business areas to achieve leverage. While there are no immediate negative catalysts, there are concerns about the messaging around the SiC business value. Additionally, questions remain about the extent of vertical integration in the datacomm business and opportunities in various networking technologies. Given these factors, the risk-reward balance appears relatively even, justifying a Hold rating.

In another report released on May 8, B.Riley Financial also maintained a Hold rating on the stock with a $77.00 price target.