JPMorgan Analyst Lifts Coherent Forecast, Cites Strong Margins And Datacom Growth

JPMorgan analyst Samik Chatterjee raised the price forecast for Coherent Corp. COHR from $110 to $120 and reiterated the Overweight rating.

On Wednesday, the company reported second-quarter sales of $1.44 billion, beating the consensus of $1.37 billion and adjusted EPS of 95 cents surpassed the consensus of 69 cents.

Coherent forecasts third-quarter revenue of $1.39 billion-$1.48 billion (vs. consensus of $1.4 billion) and adjusted EPS of 75 cents to 95 cents (vs. consensus of 76 cents).

The analyst writes that the company is making progress on multiple strategic initiatives driven by Datacom momentum, an improving Telecom recovery outlook, and effective margin execution (including better yields, cost management, and leverage).

Consequently, Chatterjee refined the forecast while keeping his above-consensus medium-term estimates largely unchanged.

Despite challenges in Industrial & Other markets, the analyst raised the price target, reflecting higher earnings multiple to account for the company’s strong execution track record and increased confidence in its ability to deliver upside.

Also, Needham analyst James Ricchiuti maintained a Buy rating and raised the price forecast from $120 to $125.

Additionally, Rosenblatt analyst Mike Genovese maintained a Neutral rating and raised the price forecast from $105 to $115, while B of A Securities analyst Vivek Arya maintained the stock with a Buy and boosted the price forecast from $120 to $125.

Investors can gain exposure to the stock via Vanguard S&P Mid-Cap 400 Growth ETF IVOG and Vanguard S&P Mid-Cap 400 Growth ETF JMEE.

Price Action: Coherent shares are up 12.7% at $101.50 at the last check Thursday.

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