Stock market today: Stocks fall as investors rotate out of tech into Jackson Hole
Investing.com - Wolfe Research raised its price target on Lumentum (NASDAQ:LITE) to $150.00 from $120.00 on Wednesday, while maintaining an Outperform rating on the optical components manufacturer. The stock, currently trading at $119.66, has demonstrated remarkable momentum with a 159% return over the past year and is approaching its 52-week high of $120.30.
The firm cited several structural drivers supporting its bullish outlook, including the emergence of artificial intelligence, which is driving significant optical traffic growth across the industry.
Wolfe Research also highlighted the increasing importance of Indium Phosphide technology as data center interconnect speeds increase and distances expand, positioning Lumentum to benefit from this trend.
The research firm noted that the market is increasingly favoring Western vendors with scale and vertical integration capabilities, another factor working in Lumentum’s favor.
Wolfe Research suggested that Lumentum’s current valuation of 15.3x calendar year 2027 earnings per share is "too cheap" for a business growing at 20-25%+ with margin expansion expected over the next several years. Despite current profitability challenges, analysts tracked by InvestingPro predict the company will return to profitability this fiscal year.
In other recent news, Lumentum Holdings Inc. reported robust financial results for the fourth quarter of fiscal year 2025. The company exceeded analysts’ expectations by posting an earnings per share (EPS) of $0.88, surpassing the projected $0.80. Additionally, Lumentum’s revenue reached $480.7 million, outpacing the anticipated $467.31 million. These strong earnings and revenue figures highlight the company’s successful performance during the period. Raymond James responded to these results by raising Lumentum’s stock price target to $145 from $125, while maintaining a Strong Buy rating. The firm pointed to the positive impact of Lumentum’s Optical Circuit Switches, which generated initial revenue faster than expected. These developments underscore Lumentum’s solid footing in the market and its potential for future growth.
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