Susquehanna analyst Christopher Rolland reiterated a Buy rating on Coherent Corp (COHR – Research Report) today and set a price target of $135.00.
Christopher Rolland has given his Buy rating due to a combination of factors that indicate strong growth prospects for Coherent Corp. The company has shown robust results in the Datacom segment, with a notable ramp in 800G technology and sustained demand for 400G and below. Furthermore, the company is on track to advance to 1.6T by 2025, with 3.2T already under development. This technological advancement is supported by increased production of indium phosphide (InP), bolstered by CHIPS Act funding, which will further enhance their capabilities.
Additionally, Coherent’s outlook in the Telecom sector has shifted from cautious to cautiously optimistic, following two consecutive quarters of growth. The industrial-related markets have also surpassed expectations, particularly in display capital equipment and semi-cap equipment. The company’s gross margins have improved, and they are steadily working towards a long-term goal of over 40% GM. Coherent’s strategic focus on high-growth areas, product cost reductions, and pricing optimizations are expected to drive further improvements. The company’s efforts to reduce debt, having paid down $132 million recently, also adds to their financial strength, contributing to Rolland’s positive outlook and the raised price target of $135.
In another report released today, Barclays also maintained a Buy rating on the stock with a $125.00 price target.