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On Thursday, Rosenblatt Securities increased its price target for Coherent (NYSE:COHR) shares to $115 from the previous $105, while the firm maintained a Neutral rating on the stock. The adjustment follows Coherent’s strong performance in the second quarter of fiscal year 2025. Currently trading at $90.1, the stock sits within a broader analyst target range of $60-$136, according to InvestingPro data, which shows the stock has demonstrated significant volatility and gained over 55% in the past six months.
The Rosenblatt analyst highlighted the company’s recent quarterly results, stating, "2Q25 was clearly a good quarter." In response to these results, the firm has revised its estimates upward and set a new price target. The analyst noted that the stock was trading above $100 after-hours following the announcement. With a market capitalization of $13.94 billion and a healthy current ratio of 2.67, InvestingPro analysis reveals strong liquidity metrics, though the stock appears overvalued based on their proprietary Fair Value model.
Looking ahead, the analyst anticipates that Coherent’s growth narrative could gain momentum in fiscal year 2026. The upcoming Analyst Day in May 2025 is expected to serve as a potential positive catalyst for the company. Rosenblatt’s valuation of Coherent’s stock continues to be based on a multiple of 27 times the projected earnings per share (EPS) for FY26. The company’s revenue is forecast to grow by 18% in FY25, with an EV/EBITDA multiple of 24.84x reflecting high growth expectations.
The analyst’s commentary also pointed to areas where improvements are anticipated, saying, "We still think the story should further accelerate in FY26, and view the May 2025 Analyst Day as a probable positive catalyst." However, the firm is waiting for further enhancements in margins, balance sheet strength, and industrial exposure before altering its rating.
Rosenblatt’s maintained Neutral rating suggests a cautious stance, with the firm looking for additional signs of progress in Coherent’s financial and operational performance. The increased price target reflects the positive developments in the company’s most recent quarter and the potential for future growth.
In other recent news, Coherent Corp. has reported better-than-expected second-quarter earnings, with an adjusted earnings per share of $0.95, surpassing analyst estimates of $0.69. The company’s revenue for the quarter also exceeded expectations, reaching $1.44 billion, a 27% increase year over year, compared to the consensus forecast of $1.37 billion. These developments are largely due to robust demand in AI-related data center applications and growth in the telecom sector.
For the upcoming third quarter, Coherent projects adjusted earnings per share between $0.75 and $0.95, with the midpoint above the analyst consensus of $0.76. The company’s revenue is expected to range from $1.39 billion to $1.48 billion, compared to the $1.4 billion consensus estimate.
Additionally, Coherent’s GAAP gross margin expanded to 35.5%, up 452 basis points year over year, while non-GAAP gross margin increased to 38.2%, a 363 basis point improvement year over year. CFO Sherri Luther noted the company’s financial progress, highlighting that "Revenue growth and margin expansion drove significant sequential and year-over-year increases in our GAAP and Non-GAAP EPS. We also paid down $132 million of our outstanding debt."
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