Optics Rebound In Sight: J.P. Morgan Boost Targets On Coherent, Lumentum Amid Tech Shift Easing

J.P. Morgan analyst Samik Chatterjee sees a brighter outlook for Coherent Corp. (NYSE:COHR) and Lumentum Holdings Inc. (NASDAQ:LITE), having successfully scaled the “wall of worry” that defined the optics sector’s recent past.

With concerns easing around CPO (co-packaged optics) disruption, pricing pressure, tech transitions such as EML to SiPh, and tariffs, Chatterjee expects optics firms to deliver stronger performance in the second half of 2025, supported by improving demand and better strategic positioning.

For Coherent, the analyst raised the target multiple to 22x and increased the December 2025 price forecast to $100 from $86 while maintaining an Overweight rating.

Also Read: Coherent Gets Analyst Upgrade, But Tariffs Could Cast Shadow Over Future Growth

He cited the company’s effective navigation of CPO disruption and the strength of its broad product portfolio as key drivers of confidence in its long-term growth and margin goals.

Chatterjee now models 10% revenue growth for Coherent in fiscal year 2026 and fiscal year 2027, with gross margins reaching approximately 39% and 40%, respectively. Updated EPS forecasts stand at $4.50 for fiscal year 2026 and $5.70 for fiscal year 2027, with the latter about 4% above consensus estimates.

For Lumentum, Chatterjee raised the target multiple to 20x and lifted the December 2025 price forecast to $100 from $87, reiterating an Overweight rating.

The analyst highlighted stronger Telecom DCI demand and a faster ramp in Datacom, particularly through Cloudlight, as key drivers of Lumentum’s improved revenue outlook and raised earnings forecasts.

The analyst now projects that Lumentum will reach $600 million in quarterly revenue by the fourth quarter of fiscal 2026. EPS estimates have been raised to $4.20 for fiscal year 2026 (up from $3.95) and $5.90 for fiscal year 2027 (up from $5.55).

Recently, Lumentum raised its fourth-quarter revenue guidance to $465 million-$475 million, up from the prior $440 million-$470 million range. The company also expects to reach $500 million in revenue in the first quarter of fiscal 2026, one quarter ahead of schedule.

It also raised Q4 earnings guidance to 78–85 cents per share, with operating margins now expected in the 14%–15% range.

Following recent company updates from Lumentum, multiple Wall Street analysts have raised their price forecasts, signaling increased confidence in the stock’s trajectory.

The ratings are generally positive, ranging from Neutral to Strong Buy, with firms like Rosenblatt and Needham now targeting a price of $105.

Price Action: COHR shares are trading higher by 0.23% to $81.79, and LITE is up 4.03% to $85.68 at last check Thursday.

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