Analysts Just Slashed Their Price Targets on These 10 Stocks

4. Arm Holdings (NASDAQ:ARM)

Average Upside Potential: 52%

Number of Hedge Fund Holders: 52

Barclays analyst Tom O’Malley, who keeps an Overweight rating on Arm, cut his price target to $325 from $360 on November 5. He pointed to the company’s new AGI CPU, a hardware product with lower margins than licensing, which lowers his earnings estimates. TD Cowen, still at Buy, went to $250 from $350, citing progress on procurement and supply chain for the same chip.

Both firms still rate the stock positively, at Overweight and Buy. The calls followed Arm’s earnings, where revenue hit a record $1.44 billion. Licensing sales rose 50% to $773 million and royalty revenue rose 8% to $670 million, but the outlook failed to beat expectations, and the stock fell about 14%.

Arm designs the processor architecture that other companies license, and the AGI CPU is its move into selling a chip of its own, which is why both firms are adjusting their margin and supply assumptions. Earlier this fall the stock jumped 17% after Arm set a $2 billion revenue goal. Our earlier coverage of the rally after its $2 billion revenue goal shows how sentiment has shifted since.

3. Coherent (NYSE:COHR)

Average Upside Potential: 81%

Number of Hedge Fund Holders: 105

Rosenblatt analyst Mike Genovese kept a Buy rating on Coherent on November 5 and cut his price target to $400 from $500. He blamed lower sector multiples rather than the business; his new target is about 26 times fiscal 2028 earnings. He sees demand as secure: calendar 2027 is essentially booked, customers are already ordering into 2028, and long-term agreements run through the end of the decade. Craig-Hallum analyst Richard Shannon also stayed at Buy that day but cut his target to $310 from $480. Both firms kept their Buy ratings, so the changes are to price targets, not to their views of the company.

Coherent reported fiscal first-quarter results this week, and the cuts followed. Revenue rose 50% to $2.37 billion and second-quarter guidance ran from $2.55 billion to $2.75 billion. The stock still fell about 13% the next day.

Coherent, based in Saxonburg, Pennsylvania, makes the lasers and optical components that carry data inside AI data centers, along with products for communications and industrial customers. We asked whether the shares look reasonably priced in our look at Coherent’s valuation.

2. Lumentum (NASDAQ:LITE)

Average Upside Potential: 85%

Number of Hedge Fund Holders: 111

B. Riley analyst Dave Kang downgraded Lumentum to Neutral from Buy on November 3 and cut his price target to $770 from $1,142, citing limited upside under the deal terms. Before the deal, B. Riley had named Lumentum its top AI optics pick because its capacity was sold out through 2029. Stifel made the same move that day, downgrading to Hold from Buy and lowering its target to $806 from $1,232, also over the merger terms.

Both notes make the same point. Marvell’s $115 billion all-stock deal to buy Lumentum gives each Lumentum share 4.5 Marvell shares at a fixed ratio, and the deal isn’t expected to close until 2028. Until then, Lumentum’s stock tracks Marvell’s price instead of its own results. B. Riley’s note put the implied value at 4.5 times Marvell’s $171 share price. Marvell shareholders would own about 67% of the combined company, and the deal carries a $3.2 billion termination fee, about $35 per Lumentum share.

Lumentum makes the lasers and optical parts used in AI networks. Our piece on whether its valuation can hold up as demand outruns supply looks at the company before the deal.

1. Marvell Technology (NASDAQ:MRVL)

Average Upside Potential: 110%

Number of Hedge Fund Holders: 96

BofA analyst Vivek Arya downgraded Marvell to Neutral from Buy on November 3 and cut his price target to $225 from $400. He said the all-stock deal to buy Lumentum “comes as a considerable surprise,” since an analyst day last month made no mention of a deal this large. He argues that about $1 billion of cost savings can’t offset a roughly 50% rise in share count, and he flags a long stock overhang, a regulatory process in China and customer conflicts. His new target uses 20 times calendar 2028 earnings, down from 33 times, because sector multiples have contracted.

TD Cowen analyst Sean O’Loughlin made the same downgrade that day, to Hold from Buy, with a target of $175 down from $350. He adds that consensus expects a larger optical market in 2027 than TD Cowen does, so if the cycle turns, Lumentum’s operating leverage could worsen the dilution.

Marvell designs chips that move data inside data centers. Our look at what the few analysts who won’t buy it predates the deal. The deal would give Marvell shareholders about 67% of the combined company, and it is expected to close in the first half of 2028.

READ NEXT: Marvell (MRVL) Raises Its 2028 Revenue Target to $20 Billion. Can Growth Justify the Premium?and Coherent (COHR) Could Benefit From AI Networking Even if CPO Adoption Takes Time

Follow Insider Monkey on Google News.