Coherent (COHR) Earns Buy from Benchmark on Growth Momentum

On May 29, Mark Miller of Benchmark Company reiterated a Buy rating on Coherent Corp. (NYSE:COHR), with an unchanged price target of $95. The analyst based his bullish view on the company’s operational success as well as on the efforts the company is making to improve its financial position.

Miller is encouraged by the company’s aim to achieve a revenue growth in the range of 10% to 15%. Within the key product segments, Data Center and Communications end-market is projected to grow 15% to 20%, while the Industrial segment is expected to rise 5% to 10%. Miller attributes this expected growth to ongoing innovations in technologies such as transceivers, optical switches, and precision manufacturing lasers.

On the financial side, Coherent plans to improve its profitability by targeting a gross margin of over 42% and achieving it through cost management and pricing strategies. The analyst also emphasized that to capitalize on the rising demand for high-performance computing, the company is prudently investing in R&D and expanding its indium phosphide (InP) wafer capacity.

Furthermore, the company is also making efforts to strengthen its balance sheet and has already made some progress in debt reduction. These factors led the analyst to reiterate his bullish stance.

Coherent Corp. (NYSE:COHR) is a developer and manufacturer of engineered materials, networking products, optoelectronic components, and optical and laser systems for the industrial, communications, electronics, and instrumentation markets. The company holds a strong position in the optical communications market, particularly with its innovative solutions for data centers, such as datacom optical transceivers.

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Disclosure: None.