Stifel raises Lumentum stock price target to $100 on improved outlook

On Thursday, Stifel analysts raised the price target for Lumentum stock (NASDAQ: LITE) to $100 from the previous target of $85, while maintaining a Buy rating. Currently trading at $80.28, the stock sits between analysts’ range of $70-$110, with 15 analysts recently revising earnings estimates upward. This adjustment follows Lumentum’s release of updated guidance metrics for the fourth quarter of fiscal year 2025, which were announced yesterday afternoon.

The new guidance includes an increase in revenue estimates to a midpoint of $470 million, an adjusted operating margin of 14.5%, and an adjusted earnings per share estimate of $0.83. With a strong liquidity position reflected in a current ratio of 4.72, Lumentum’s management attributed this positive outlook to broad-based strength across its underlying businesses, as shared earlier today at an investor conference. According to InvestingPro, the company shows promising momentum despite current market challenges.

Management also revealed an accelerated timeline for reaching a $500 million revenue target, now expected by the first quarter of fiscal year 2026, a full quarter ahead of prior expectations. Additionally, Lumentum anticipates reaching a $600 million revenue target by the end of the fourth quarter of fiscal year 2026 or the first quarter of fiscal year 2027.

The updated guidance reflects faster-than-expected product ramps and improved execution as Lumentum streamlines its core projects. The company is also benefiting from an acceleration in compute infrastructure build-outs, which is contributing to its success in the emerging AI ecosystem.

In other recent news, Lumentum Holdings Inc (NASDAQ:LITE). has updated its revenue guidance for the fourth quarter of fiscal 2025, now expecting revenues between $465 million and $475 million, up from the previous range of $440 million to $470 million. The company has also increased its revenue forecast to $470 million, with an adjusted operating margin of 14.5% and adjusted earnings per share of $0.83. Looking ahead, Lumentum aims to achieve a $500 million revenue goal by the first quarter of fiscal 2026, earlier than previously anticipated, and targets $600 million by the fourth quarter of fiscal 2026 or the first quarter of fiscal 2027.

Analyst firms have responded to these developments with various stock price target adjustments. Stifel raised its price target to $100, maintaining a Buy rating, while Rosenblatt increased its target to $105, also with a Buy rating, citing improved gross margins. Raymond (NSE:RYMD) James raised the target to $90, maintaining a Strong Buy rating, and Morgan Stanley (NYSE:MS) adjusted its target to $76, keeping an Equalweight rating. UBS, on the other hand, maintained a Neutral rating with a price target of $78. These updates reflect Lumentum’s positive financial outlook and strategic advancements in its product offerings and market positioning.

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