Coherent Corp to divest Illinois epitaxial fab facility

SAXONBURG - Coherent Corp. (NYSE:COHR), a company specializing in materials, networking, and laser technologies, announced the planned sale of its epitaxial fabrication facility located in Champaign, Illinois. With a market capitalization of $11.7 billion and according to InvestingPro analysis, the company appears overvalued at current trading levels. This facility sale move is part of the company’s strategy to streamline its manufacturing operations, coming at a time when the stock has seen a significant 26.7% return over the past year.

The facility, spanning 65,000 square feet, houses five G3 epitaxial systems within 15,000 square feet of Class 1000 ballroom-style cleanrooms. The fab is equipped for expansion up to 10 epitaxial tools and has historically produced wafers ranging from 2-inch to 6-inch using indium phosphide and gallium arsenide. The campus, which is situated six miles from the University of Illinois at Urbana-Champaign, includes four buildings and an array of fabrication and characterization tools. InvestingPro data shows Coherent maintains a healthy current ratio of 2.67, indicating strong ability to manage short-term obligations while undertaking such strategic moves.

Coherent’s decision to sell the Champaign facility is aligned with its ongoing efforts to optimize its manufacturing footprint. However, the company has not disclosed any potential buyers or the terms of the sale at this time.

Coherent, with a global presence, continues to focus on enabling market innovators to shape the future with advanced technologies. The company serves a diverse set of applications across industrial, communications, electronics, and instrumentation markets and maintains a broad network of research, development, manufacturing, sales, service, and distribution facilities worldwide.

The information about the sale is based on a press release statement from Coherent Corp. Interested parties regarding the facility sale are directed to contact Tim Challingsworth, Vice President of Strategy & Corporate Development, at Coherent.

The sale of the Champaign facility represents a significant step in Coherent’s larger business strategy to refine its operational structure. With revenue growth of 14.6% in the last twelve months and 16 analysts revising earnings estimates upward according to InvestingPro, the company’s broader mission to empower technological innovators in various markets remains unchanged. Investors can access detailed analysis and 12 additional ProTips about Coherent’s performance through InvestingPro’s comprehensive research reports, available for over 1,400 US stocks.

In other recent news, Coherent Corp. has introduced a new embedded Optical Time Domain Reflectometer (eOTDR) designed for fiber network diagnostics, enhancing real-time monitoring capabilities for data centers and telecom networks. The company has also launched the 2x400G-FR4 Lite optical transceiver, aimed at AI-driven data centers and high-speed Ethernet networks, promising energy-efficient performance with a 500-meter reach. Coherent’s commitment to innovation is further highlighted by Raymond James analyst Simon Leopold upgrading the company’s stock rating to Strong Buy, despite adjusting the price target to $91.00 from $110.00. This decision follows recent industry events and reflects strong demand for 800G solutions and emerging optical technologies.

Meanwhile, Lumentum Holdings Inc. received an upgrade from Raymond James to Strong Buy, with the price target adjusted to $82.00 from $96.00. The analyst’s revised model anticipates significant growth in A.I. backend transceiver sales, predicting a compound annual growth rate of 30% from 2024. Additionally, Applied Optoelectronics has secured a significant deal with Amazon, granting the tech giant a warrant to purchase up to 7.95 million shares, which could bolster its presence in the 800+G transceiver market. Rosenblatt Securities maintains a Buy rating for Applied Optoelectronics, underscoring the importance of this arrangement with Amazon.

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