Morgan Stanley Raises Price Target to $85, Keeps Equal-Weight Rating for LITE

Morgan Stanley raised its price target for Lumentum Holdings (LITE) to $85, an 11.84% increase, while maintaining an Equal-Weight rating. The decision suggests a balanced view of the company's market position and future performance. The average one-year price target from 16 analysts is $95.06, with a high estimate of $120.00 and a low estimate of $73.00, implying a 3.25% upside from the current price.

Morgan Stanley has increased its price target for Lumentum Holdings (LITE) to $85, an 11.84% increase from its previous target of $76. The investment bank maintains an Equal-Weight rating, indicating a balanced view of the company's market position and future performance. This new target suggests that analysts at Morgan Stanley believe Lumentum's stock has significant upside potential.

The decision to raise the price target comes amidst a strong performance by Lumentum and its peers in the optical and photonic component industry. Increasing data speed needs, necessitating more fiber and optical transmission, have been a boon for companies like Lumentum, Ciena (CIEN), Corning (GLW), and Coherent (COHR), which have seen their stock prices rise by an average of about 80% since the beginning of 2024 [1].

The new price target of $85 suggests a potential downside of 8.03% from the company's current price. This indicates that Morgan Stanley believes Lumentum's stock is currently undervalued, given the company's strong fundamentals and the growing demand for optical components in the AI and ML space.

While the average one-year price target from 16 analysts is $95.06, with a high estimate of $120.00 and a low estimate of $73.00, the consensus target price is $85.53. This implies a 3.25% upside from the current price, indicating that the market is optimistic about Lumentum's future prospects [2].

In related news, Lumentum's stock price surged on Tuesday, July 8, 2025, after the announcement of the price target increase. The stock traded up $1.34, hitting $92.42, with a significant volume of 643,260 shares trading hands [2].

Morgan Stanley's decision to raise the price target for Lumentum is a reflection of the growing demand for optical components in the AI and ML space. As data speeds continue to increase, the need for more efficient and reliable optical transmission will only grow, creating a strong tailwind for companies like Lumentum.

References:
[1] https://www.tipranks.com/news/the-fly/lumentum-price-target-raised-to-85-from-76-at-morgan-stanley-thefly
[2] https://www.marketbeat.com/instant-alerts/morgan-stanley-issues-positive-forecast-for-lumentum-nasdaqlite-stock-price-2025-07-08/