Coherent Corp’s Strategic Initiatives and Growth Prospects Earn Buy Rating from Analyst

Christopher Rolland, an analyst from Susquehanna, reiterated the Buy rating on Coherent Corp (COHR – Research Report). The associated price target remains the same with $100.00.

Christopher Rolland has given his Buy rating due to a combination of factors including Coherent Corp’s promising long-term growth prospects and strategic initiatives. The company has set ambitious financial targets for FY25, aiming for approximately 23% year-over-year revenue growth, a 37.9% non-GAAP gross margin, and a 17.8% operating margin. Additionally, Coherent has introduced a new financial model projecting a 10-15%+ revenue CAGR over the next 3-4 years, driven by strong performance in the DC/Comms and Industrial segments.
Coherent’s strategic shift to a two-segment reporting structure aligns with its focus on high-growth markets. The company is targeting significant market opportunities, including a $44B SAM for DC/Comms and a $23B SAM for Industrial by 2030. Furthermore, Coherent’s advancements in technology, such as the Optical Circuit Switch and transceiver developments, position it well for future growth. The company’s disciplined capital allocation strategy, emphasizing organic investment and debt reduction, further supports its positive outlook.

In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $90.00 price target.

Based on the recent corporate insider activity of 80 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of COHR in relation to earlier this year.