Lumentum, Coherent in focus as StoneX starts with Buy ratings

Optical networking companies Lumentum (LITE) and Coherent (COHR) were in focus on Monday as investment firm StoneX started coverage on the pair with Buy ratings and respective price targets of $1,200 and $425.

For Lumentum, StoneX analyst Cody Acree said the momentum in near-packaged optics is pulling up a fiscal 2028 investment case. “Management says expected demand has moved forward from late CY28/late CY29 to late CY27/early CY28, while the prospective scale-up mix is now framed at roughly equal shares for NPO and [co-packaged optics],” Acree wrote in a note to clients. “Broader ecosystem evidence—expanding customer engagements, Open CPX standardization, and new 224G drivers, TIAs, and retimers—supports NP as a credible deployment architecture rather than distant optionality. Lumentum can participate through integrated [continuous-wave] lasers, external light-source assemblies and optical engines.”

For Coherent, the company is benefiting from the expansion of six-inch indium phosphide, Acree said. “Management targeted a September-quarter capacity doubling and more than another doubling by end-CY27,” he wrote in a separate note. “Sherman and Järfälla support the ramp, with Zurich production expected in 1H CY27. November results provide the next progress check.”

Additionally, the analyst said that industry expansion has made cost leadership “increasingly valuable.”

“Management expects a quarter above $3B by FY27-end,” Acree explained. “Coherent's initial scale-out CPO production ramp is expected in 4Q CY26, followed by scale-up CPO and NP production in 2H CY27. More than ten engagements in each architecture support the development pipeline, although awarded content and production revenue remain undisclosed.”

Recommended For You

Create Your Free Account to Keep Reading

Get the confidence to navigate an uncertain market with free breaking news and stock alerts.