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On Thursday, Stifel analysts maintained their optimistic stance on Coherent (NYSE:COHR), currently trading at $78.25, reiterating a Buy rating and a $100.00 price target for the company’s stock. According to InvestingPro data, analyst targets range from $77 to $125, with a strong consensus recommendation of 1.58 (Buy). The decision followed the attendance of Stifel analysts at Coherent’s Analyst/Investor Day, where the company presented its long-term strategy and financial targets.
During the event, Coherent’s management outlined the company’s focus on photonic technologies and their application across various industries. The company has established a strong presence in these technologies, continuing to emphasize a material science approach. With a robust current ratio of 2.47 and impressive revenue growth of 21.67% over the last twelve months, Coherent’s management identified two primary growth markets—Datacenter and Communications, and Industrial—which they expect to contribute to a compound annual growth rate (CAGR) of 10%-15% in the company’s top-line revenue over the next three to four years.
Coherent’s leadership team also shared their goals for enhancing profitability. They are targeting gross and operating margins of over 42% and 24%, respectively. These targets are to be achieved through increased revenue volume, optimized product pricing, and reduced product costs. Additionally, the company plans to cut non-strategic expenses, focusing particularly on selling, general, and administrative (SG&A) costs.
The Analyst Day insights reinforced Stifel’s positive long-term thesis on Coherent. According to the analysts, the management’s commentary during the event validated their outlook, leading to the reaffirmation of the Buy rating on Coherent’s shares. The analysts’ maintained price target of $100.00 reflects their confidence in the company’s strategic direction and potential for growth in the coming years. Based on InvestingPro analysis, Coherent appears to be trading near its Fair Value, with 8 additional exclusive ProTips and comprehensive financial metrics available to subscribers.
In other recent news, Coherent has been the focus of several analyst updates following its Analyst & Investor Day. Rosenblatt Securities has maintained its Buy rating with a $95 price target, citing the company’s strategic direction and its CEO’s commitment to execution. Needham has also raised its price target for Coherent to $90, reflecting confidence in the company’s growth prospects, particularly in the photonics technology sector. Meanwhile, BofA Securities increased its price target to $92, highlighting Coherent’s unique portfolio and potential market share growth in the data center sector.
JPMorgan reiterated an Overweight rating with an $86 target, noting potential revenue growth in the Datacenter & Communications and Industrial sectors, and a raised gross margin target to over 42%. Jefferies expressed continued confidence in Coherent’s long-term prospects, maintaining a Buy rating with a $110 price target, and projecting double-digit growth in revenue and earnings per share by fiscal years 2028/29. Analysts across the board have emphasized Coherent’s strategic focus on growth opportunities, operational efficiencies, and potential divestitures to enhance profitability. These developments underscore a positive outlook for Coherent as it positions itself within high-growth sectors.
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