Coherent's Characterization Of Cutting Market In China As "Growth Opportunity": Analyst Digs In
Portfolio Pulse from Nabaparna Bhattacharya
Needham analyst Jim Ricchiuti has reiterated a Buy rating on Coherent Corp. (NYSE:COHR) and raised the price target from $46 to $52. Despite macro headwinds in the Industrial sector, COHR is expected to see improvements in CY24. The company anticipates double-digit growth in the semi-cap business and a 70% increase in the excimer laser business from 2023-2028. COHR views the cutting market in China as a growth opportunity, contrasting with other western fiber laser companies. The overall TAM for Industrial is estimated at $22 billion with a 9% CAGR over five years, while Communications has a 16% CAGR with an estimated TAM of $23 billion. FY24 EPS is expected to be $1.20 with revenue estimates raised to $4.598 billion. COHR shares dropped by 1.75% to $43.34.
December 15, 2023 | 7:25 pm
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Needham analyst Jim Ricchiuti reaffirmed a Buy rating on Coherent Corp. and increased the price target to $52, citing growth opportunities in the semi-cap and excimer laser businesses, and a positive outlook on the Chinese cutting market.
The reiteration of a Buy rating and an increased price target by a reputable analyst suggests a positive short-term impact on COHR's stock price. The optimistic growth projections for the semi-cap and excimer laser businesses, along with a strategic view on the Chinese market, are likely to be viewed favorably by investors. However, the actual share price has declined, which may indicate that the market has not fully absorbed or agreed with the analyst's outlook.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100