Rosenblatt Keeps Buy Rating on Coherent Despite Lumentum's Gain

Rosenblatt maintains a Buy rating on Coherent Corp. (COHR) despite competitor Lumentum gaining momentum in laser chip, OCS, and CPO sales categories. The firm believes Coherent will "catch up in these key AI Optical categories over the course of FY26 and into FY27." Rosenblatt lowered its price target on the stock to $135 from $150.

Coherent Corp. (COHR) has seen a 20% drop in its stock price following the release of its Q4 2025 earnings report. The company reported a 16% year-over-year (YoY) increase in revenue, driven by strong demand in AI data centers and networking segments. Despite the impressive results, Coherent's cautious guidance for the next quarter raised concerns among investors, leading to a post-market stock drop [1].

Analysts, however, remain optimistic about Coherent's growth prospects. Chris Lau of Reuters upgraded the stock, citing potential growth in AI data centers and the company's new product lines. Lau noted that Coherent's 39% YoY revenue growth in its networking business was particularly strong, driven by a 39% surge in AI-driven networking business to $945 million [1]. The analyst also highlighted the company's planned sale of its defense laser business for $400 million, which will be used to pay down a portion of its $3.7 billion debt [1].

The average one-year price target for COHR stock is $109.96, indicating significant upside potential. However, GuruFocus estimates suggest a potential downside, highlighting diverse perspectives on COHR's stock value. Despite the cautious outlook, Coherent's focus on innovation and strategic investments in key growth areas positions it for long-term success. The company's strong demand for optical networking equipment from AI data centers and potential collaborations with leading AI companies like NVIDIA further underscore its growth potential [3].

Meanwhile, Lumentum Holdings Inc. (LITE) reported strong financial results for the fourth quarter of fiscal year 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $0.88, compared to the forecasted $0.80. The company also reported revenue of $480.7 million, exceeding the expected $467.31 million. Following the announcement, Lumentum’s stock rose by 4.03% in aftermarket trading, reflecting investor confidence in the company’s performance and future prospects [2].

Lumentum’s Q4 revenue of $480.7 million surpassed forecasts, driven by strong demand in optical hardware. The company achieved a non-GAAP EPS of $0.88, beating the forecast by 10%. Stock price increased by 4.03% in aftermarket trading, indicating positive investor sentiment. Lumentum’s strategic investments in manufacturing and innovation are expected to drive future growth. Strong performance in EML shipments and new product launches highlight competitive advantages [2].

Rosenblatt maintains a Buy rating on Coherent Corp. (COHR) despite competitor Lumentum gaining momentum in laser chip, OCS, and CPO sales categories. The firm believes Coherent will "catch up in these key AI Optical categories over the course of FY26 and into FY27." Rosenblatt lowered its price target on the stock to $135 from $150 [3].

References:
1. [https://www.ainvest.com/news/coherent-corp-upgrade-analyst-highlights-growth-potential-upside-2508/](https://www.ainvest.com/news/coherent-corp-upgrade-analyst-highlights-growth-potential-upside-2508/)
2. [https://www.investing.com/news/transcripts/earnings-call-transcript-lumentum-holdings-beats-q4-2025-forecasts-stock-surges-93CH-4186913](https://www.investing.com/news/transcripts/earnings-call-transcript-lumentum-holdings-beats-q4-2025-forecasts-stock-surges-93CH-4186913)
3. [https://futurumgroup.com/insights/coherent-q4-fy-2025-earnings-rise-on-ai-datacenter-and-networking-demand/](https://futurumgroup.com/insights/coherent-q4-fy-2025-earnings-rise-on-ai-datacenter-and-networking-demand/)