Rizwan Siddiqui
2 min read
In This Article:
On May 23, Morgan Stanley analyst Meta Marshall raised the price target on Coherent Corp. (NYSE:COHR) to $74 from $70, but reiterated her cautious stance with a Hold rating.
The company is expected to hold its investor day on May 28, where Marshall expects it will present a long-term growth plan. This strategic plan is expected to include a roadmap to achieve over 40% gross margin, more than $6 in EPS, and outline the revenue growth trajectory from 2025 to 2028.
While a favorable outlook at the investor day should catalyze the share price, Marshall sees limited upside potential, as the stock has already rallied substantially over the past month.
Another reason for her cautious view is that she believes achieving gross margins above 40% will be a daunting task for the company. This is due to the impacts of tariffs and the lack of operating leverage in some business segments, which, in her view, will require more time to improve. She also expressed concerns about execution challenges in certain areas, such as the SiC business, networking technologies, and the vertical integration of the datacom business. Therefore, she maintained her Hold rating.
Coherent Corp. (NYSE:COHR) specializes in the development and manufacturing of engineered materials, networking products, optoelectronic components, and optical and laser systems for various industries, including industrial, communications, electronics, and instrumentation. The company maintains a strong foothold in the optical communications market, particularly with its advanced solutions for data centers, such as datacom optical transceivers.
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Disclosure: None.
