Lumentum, Coherent in focus as StoneX starts with Buy ratings

What happened

StoneX started coverage of optical networking companies Lumentum and Coherent with Buy ratings and price targets of $1,200 and $425. Analyst Cody Acree cited near-packaged optics momentum for Lumentum and expanding six-inch indium phosphide capacity for Coherent.

Confirmed

Global impact / market context

A Buy rating with a price target signals the broker expects the shares to rise toward that level. For investors, it frames optical networking as a growth area tied to data-center demand, and it gives both companies a fresh outside endorsement that can draw attention.

Analyst inference

The notes describe demand timing moving earlier and production capacity roughly doubling, which suggests optical component suppliers are preparing for stronger orders. Cost leadership becoming more valuable implies price competition as the industry expands, so profit per sale may matter more than raw volume.

Analyst inference

What to watch

1. Lumentum management said expected demand moved forward from the later dates to the earlier dates, with near-packaged optics and co-packaged optics at roughly equal shares. Confirmed
2. Coherent management targeted a September-quarter capacity doubling and more than another doubling by the end of the stated period, with Zurich production expected in the first half of the stated period. Confirmed
3. Watch Coherent's November results as the next progress check on whether that capacity ramp is on schedule, since delays would weaken the case for earlier demand and the analyst's growth assumptions. Analyst inference

Evidence

• seekingalpha.com