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Investing.com - Needham has reiterated its Buy rating and $120.00 price target on Coherent (NYSE:COHR) following the company’s fourth-quarter fiscal 2025 results. The company, which has shown impressive momentum with a 70% return over the past year and maintains a "GOOD" financial health rating according to InvestingPro, continues to demonstrate strong market performance.
Coherent exceeded consensus expectations, with revenue beating by 0.5% and earnings per share coming in $0.08 above estimates. The company’s first-quarter guidance aligned with consensus expectations after adjusting for its divested Aerospace & Defense business.
The fourth-quarter performance was primarily driven by strong demand in the Data Center & Communications segment, which grew 39% year-over-year, while Industrial sales declined 8% compared to the same period last year.
Needham noted that management believes Coherent gained market share in Datacom transceivers throughout fiscal 2025, though this assessment contrasts with recent data points from industry peers. The firm also highlighted that Coherent’s first-quarter revenue guidance of 15% year-over-year growth appears less impressive compared to competitor Lumentum’s networking growth.
Despite modestly decreasing fiscal 2026 revenue estimates, Needham increased its adjusted earnings per share estimates for the same period, citing strong secular tailwinds benefiting the broader industry. Analyst targets currently range from $77 to $127, with InvestingPro offering 12 additional key insights about Coherent’s growth potential and market position in its comprehensive Pro Research Report.
In other recent news, Coherent reported its fourth-quarter earnings for fiscal 2025, revealing a robust performance with an earnings per share (EPS) of $3.53, significantly higher than the previous year’s $1.21. The company also reported a full-year revenue of $5.81 billion, marking a 23% increase year-over-year. Despite these strong figures, Coherent’s adjusted operating margin fell below Street expectations. Stifel responded to these results by raising its price target for Coherent to $118 while maintaining a Buy rating, citing strong earnings performance. Raymond James also adjusted its price target, increasing it to $134 and maintaining a Strong Buy rating, highlighting strong performance in the DCI/ZR segment, though noting modest growth in the Datacom division. Coherent’s data center and communications segment showed continued strength, particularly in 800G products. These recent developments indicate positive analyst sentiment towards Coherent’s financial health and market position.
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