Analyst Vivek Arya of Bank of America Securities reiterated a Buy rating on Coherent Corp (COHR – Research Report), with a price target of $125.00.
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Vivek Arya has given his Buy rating due to a combination of factors driving potential earnings growth for Coherent Corp. A key driver is the strong demand for AI-driven solutions, particularly in their optics portfolio, where supply is unable to meet the robust demand. The datacom segment is experiencing significant momentum with continued customer engagement in 800G technology and future growth anticipated in 1.6T solutions by the second half of 2025.
Furthermore, Coherent Corp is experiencing a recovery in the telecommunications sector, marked by consecutive quarters of growth, which is expected to continue. The company is also improving its gross margins, with potential long-term gains from yield improvements and cost reductions. Additionally, strong operating expense discipline has led to increased EBIT margins, enhancing the company’s profitability outlook. These elements collectively support a positive earnings trajectory and a 37% EPS growth estimation, which justifies the raised price objective of $125.
COHR’s price has also changed dramatically for the past six months – from $56.250 to $90.100, which is a 60.18% increase.