Oppenheimer Maintains Buy Ratings for Coherent Amid Market Weakness
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 08 2025
0mins
Should l Buy COHR?
Coherent Corp's stock fell by 5.93% as it crossed below the 5-day SMA, reflecting broader market weakness with the Nasdaq-100 down 2.21% and the S&P 500 down 1.47%.
Despite the decline, Oppenheimer analysts maintain a favorable outlook for Coherent, highlighting its potential to benefit from faster networking standard cycles. They believe that the company's performance will improve as technological advancements in optical networking continue to accelerate, leading to profitability growth. Oppenheimer has consistently rated Coherent as a Buy, indicating strong confidence in its future performance despite current market conditions.
The implications of Oppenheimer's analysis suggest that while Coherent's stock is currently under pressure, the long-term outlook remains positive. Investors may view this as a buying opportunity, especially given the expected improvements in profitability and valuation as the optical networking sector evolves.
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Analyst Views on COHR
Wall Street analysts forecast COHR stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for COHR is 175.92 USD with a low forecast of 113.00 USD and a high forecast of 220.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
8 Buy
5 Hold
0 Sell
Moderate Buy
Current: 209.240
Low
113.00
Averages
175.92
High
220.00
Current: 209.240
Low
113.00
Averages
175.92
High
220.00
About COHR
Coherent Corp., specializing in materials, networking, and lasers, is a vertically integrated manufacturing company that develops, manufactures, and markets engineered materials, optoelectronic components and devices, and lasers for use in the industrial, communications, electronics, and instrumentation markets. Its segments include Networking, Materials and Lasers. The Networking segment leverages its compound semiconductor technology platforms and knowledge of end-user applications for its key end markets to deliver differentiated components and subsystems. The Materials segment includes engineered materials and optoelectronic devices, such as those based on zinc selenide (ZnSe), zinc sulfide (ZnS), gallium arsenide (GaAs), indium phosphide (InP), gallium antimonide (GaSb), and silicon carbide (SiC). The Lasers segment's lasers and optics products serve industrial customers in semiconductor and display capital equipment, precision manufacturing, and aerospace & defense, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
COHR Options Contract Analysis and Investment Opportunities
- Put Option Appeal: The current bid for the $195.00 put option is $18.20, and if an investor sells to open this contract, they commit to buying the stock at $195.00, effectively lowering their cost basis to $176.80, which is a 1% discount from the current price of $197.04, making it attractive for potential COHR buyers.
- Yield Potential Analysis: Should the put option expire worthless, it would yield a 9.33% return, equating to an annualized yield of 68.19%, showcasing the YieldBoost potential of this contract, appealing to investors seeking stable returns.
- Call Option Returns: The $205.00 call option has a current bid of $20.20, and if an investor buys COHR shares at $197.04 and sells this call, they could achieve a total return of 14.29% if the stock is called away at expiration, highlighting the attractiveness of this strategy.
- Risk-Reward Consideration: The $205.00 call option has a 47% chance of expiring worthless, in which case the investor retains both the stock and the premium collected, providing an additional return of 10.25%, or 74.90% annualized, emphasizing the need for investors to weigh risks and rewards when selecting options.
See More
Coherent Corp Reports Strong Quarterly Results Amid Analyst Upgrades
- Revenue Growth: Coherent Corp reported quarterly revenue of $1.69 billion, an 18% year-over-year increase and a 7% sequential rise, surpassing the market expectation of $1.64 billion, indicating strong market performance.
- Profitability Improvement: The non-GAAP earnings per share came in at $1.29, exceeding the consensus estimate of $1.21, demonstrating significant progress in cost control and operational efficiency.
- Analyst Rating Upgrades: Analyst Mike Genovese from Rosenblatt Securities raised the price target from $220 to $300, while Needham maintained a Buy rating with a $235 target, reflecting market confidence in the company's future growth.
- Capacity Expansion Plan: The company plans to increase its internal indium phosphide (InP) capacity by 100% by 2026, which will help enhance revenue and margins over the next several quarters to meet the rapid growth demands in AI and cloud computing.
See More
Coherent Reports Strong Q2 Results but Analysts Seek More Growth
- Earnings Beat: Coherent (COHR) reported Q2 fiscal 2026 results that exceeded expectations; however, analysts expressed concerns over short-term growth and gross margins, leading to a 2% decline in shares during early trading.
- Significant Order Growth: The company secured an 'exceptionally large' purchase order from a leading AI datacenter customer, expected to contribute significantly to revenue in 2027, highlighting its competitive position in a high-demand market.
- Margin Improvement Initiatives: Coherent is implementing measures to enhance gross margins, including the sale of its Munich tools division, which contributed approximately $25 million in quarterly revenue but had margins below corporate averages, with expectations for immediate accretion to gross margins and EPS.
- Strategic Consolidation: Over the past 18 months, Coherent has exited 33 underutilized sites and reduced its workforce by about 425 employees, demonstrating a strategic focus on high-ROI growth areas aimed at improving overall operational efficiency.
See More
Coherent Corp. Reports Strong Q2 2026 Earnings Growth
- Strong Revenue Growth: Coherent Corp. reported Q2 2026 revenue of $1.69 billion, reflecting a 7% sequential increase and a 17% year-over-year growth, driven by robust demand in AI data centers and communications, with expectations for continued double-digit growth in upcoming quarters.
- Margin Improvement: The non-GAAP gross margin for Q2 reached 39%, representing a 24 basis point increase from the previous quarter and a 77 basis point improvement year-over-year, indicating significant enhancements in production efficiency and cost control that bolster profitability.
- Significant Order Growth: The company reported a book-to-bill ratio exceeding 4x for data center bookings, showcasing strong customer confidence in future demand, which is expected to contribute significantly to revenue in 2027, particularly from new CPO solution orders.
- Accelerated Capacity Expansion: Coherent plans to double its internal indium phosphide production capacity by Q4 2026 and ramp up production at its Texas and Sweden facilities, ensuring it can meet the surging market demand and further solidify its leadership position in the industry.
See More
Coherent Surpasses Q2 Expectations, Stock Volatility Follows
- Earnings Beat: Coherent reported a non-GAAP EPS of $1.29 for Q2, exceeding expectations by $0.08, which highlights the company's strong profitability and boosts investor confidence in its growth prospects.
- Revenue Growth: The company achieved revenues of $1.69 billion, surpassing market expectations by $50 million, indicating sustained demand for its products and potentially driving future investment and expansion plans.
- Market Volatility: Despite the positive earnings report, Coherent's stock experienced significant volatility, reflecting market uncertainty regarding the company's future outlook, which could impact investor confidence and short-term stock performance.
- Cautious Outlook: Analysts remain cautious about Coherent's future prospects despite the strong current performance, which may affect its long-term investment appeal, prompting investors to monitor subsequent market developments and strategic adjustments by the company.
See More
Coherent Corp. Q2 Earnings Beat Expectations
- Earnings Beat: Coherent Corp. reported Q2 earnings of $1.29 per share, exceeding Wall Street's estimate of $1.21 by 6.79%, indicating enhanced profitability for the company.
- Revenue Growth: The quarterly revenue reached $1.69 billion, surpassing the analyst consensus estimate of $1.64 billion, reflecting strong demand in the data center and communications segments driving performance.
- Positive Outlook: Coherent expects third-quarter adjusted EPS between $1.28 and $1.48, slightly above the analyst estimate of $1.32, demonstrating the company's confidence in future performance.
- Stock Price Surge: Following the earnings release, Coherent's stock rose 5.21% to $221.29 in Wednesday's extended trading, indicating a positive market reaction to the company's results.
See More
COHR Options Contract Analysis and Investment Opportunities
- Put Option Appeal: The current bid for the $195.00 put option is $18.20, and if an investor sells to open this contract, they commit to buying the stock at $195.00, effectively lowering their cost basis to $176.80, which is a 1% discount from the current price of $197.04, making it attractive for potential COHR buyers.
- Yield Potential Analysis: Should the put option expire worthless, it would yield a 9.33% return, equating to an annualized yield of 68.19%, showcasing the YieldBoost potential of this contract, appealing to investors seeking stable returns.
- Call Option Returns: The $205.00 call option has a current bid of $20.20, and if an investor buys COHR shares at $197.04 and sells this call, they could achieve a total return of 14.29% if the stock is called away at expiration, highlighting the attractiveness of this strategy.
- Risk-Reward Consideration: The $205.00 call option has a 47% chance of expiring worthless, in which case the investor retains both the stock and the premium collected, providing an additional return of 10.25%, or 74.90% annualized, emphasizing the need for investors to weigh risks and rewards when selecting options.
See More
Coherent Corp Reports Strong Quarterly Results Amid Analyst Upgrades
- Revenue Growth: Coherent Corp reported quarterly revenue of $1.69 billion, an 18% year-over-year increase and a 7% sequential rise, surpassing the market expectation of $1.64 billion, indicating strong market performance.
- Profitability Improvement: The non-GAAP earnings per share came in at $1.29, exceeding the consensus estimate of $1.21, demonstrating significant progress in cost control and operational efficiency.
- Analyst Rating Upgrades: Analyst Mike Genovese from Rosenblatt Securities raised the price target from $220 to $300, while Needham maintained a Buy rating with a $235 target, reflecting market confidence in the company's future growth.
- Capacity Expansion Plan: The company plans to increase its internal indium phosphide (InP) capacity by 100% by 2026, which will help enhance revenue and margins over the next several quarters to meet the rapid growth demands in AI and cloud computing.
See More
Coherent Reports Strong Q2 Results but Analysts Seek More Growth
- Earnings Beat: Coherent (COHR) reported Q2 fiscal 2026 results that exceeded expectations; however, analysts expressed concerns over short-term growth and gross margins, leading to a 2% decline in shares during early trading.
- Significant Order Growth: The company secured an 'exceptionally large' purchase order from a leading AI datacenter customer, expected to contribute significantly to revenue in 2027, highlighting its competitive position in a high-demand market.
- Margin Improvement Initiatives: Coherent is implementing measures to enhance gross margins, including the sale of its Munich tools division, which contributed approximately $25 million in quarterly revenue but had margins below corporate averages, with expectations for immediate accretion to gross margins and EPS.
- Strategic Consolidation: Over the past 18 months, Coherent has exited 33 underutilized sites and reduced its workforce by about 425 employees, demonstrating a strategic focus on high-ROI growth areas aimed at improving overall operational efficiency.
See More
Coherent Corp. Reports Strong Q2 2026 Earnings Growth
- Strong Revenue Growth: Coherent Corp. reported Q2 2026 revenue of $1.69 billion, reflecting a 7% sequential increase and a 17% year-over-year growth, driven by robust demand in AI data centers and communications, with expectations for continued double-digit growth in upcoming quarters.
- Margin Improvement: The non-GAAP gross margin for Q2 reached 39%, representing a 24 basis point increase from the previous quarter and a 77 basis point improvement year-over-year, indicating significant enhancements in production efficiency and cost control that bolster profitability.
- Significant Order Growth: The company reported a book-to-bill ratio exceeding 4x for data center bookings, showcasing strong customer confidence in future demand, which is expected to contribute significantly to revenue in 2027, particularly from new CPO solution orders.
- Accelerated Capacity Expansion: Coherent plans to double its internal indium phosphide production capacity by Q4 2026 and ramp up production at its Texas and Sweden facilities, ensuring it can meet the surging market demand and further solidify its leadership position in the industry.
See More
Coherent Surpasses Q2 Expectations, Stock Volatility Follows
- Earnings Beat: Coherent reported a non-GAAP EPS of $1.29 for Q2, exceeding expectations by $0.08, which highlights the company's strong profitability and boosts investor confidence in its growth prospects.
- Revenue Growth: The company achieved revenues of $1.69 billion, surpassing market expectations by $50 million, indicating sustained demand for its products and potentially driving future investment and expansion plans.
- Market Volatility: Despite the positive earnings report, Coherent's stock experienced significant volatility, reflecting market uncertainty regarding the company's future outlook, which could impact investor confidence and short-term stock performance.
- Cautious Outlook: Analysts remain cautious about Coherent's future prospects despite the strong current performance, which may affect its long-term investment appeal, prompting investors to monitor subsequent market developments and strategic adjustments by the company.
See More
Coherent Corp. Q2 Earnings Beat Expectations
- Earnings Beat: Coherent Corp. reported Q2 earnings of $1.29 per share, exceeding Wall Street's estimate of $1.21 by 6.79%, indicating enhanced profitability for the company.
- Revenue Growth: The quarterly revenue reached $1.69 billion, surpassing the analyst consensus estimate of $1.64 billion, reflecting strong demand in the data center and communications segments driving performance.
- Positive Outlook: Coherent expects third-quarter adjusted EPS between $1.28 and $1.48, slightly above the analyst estimate of $1.32, demonstrating the company's confidence in future performance.
- Stock Price Surge: Following the earnings release, Coherent's stock rose 5.21% to $221.29 in Wednesday's extended trading, indicating a positive market reaction to the company's results.
See More
