Susquehanna Reaffirms Buy on Coherent (COHR) Amid Strong Outlook
On May 28, Susquehanna analyst Christopher Rolland reaffirmed a Buy rating on Coherent Corporation (NYSE:COHR) with an unchanged price target of $100. Rolland's bullish view is supported by the company's strong competitive positioning and encouraging financial guidance.
On the fundamental level, the analyst remains confident about Coherent's continued investments in advancing its technologies, such as optical circuit switches and transceivers, which are expected to support long-term growth. He further emphasized the company's efforts to improve cash flows and reduce debt.
Coherent is targeting significant market opportunities, including a $44 billion Serviceable Available Market (SAM) in the Data Center & Communications sector and a $23 billion SAM in the Industrial sector by 2030. According to Rolland, the company now views these two areas as its primary focus, aligning with its long-term growth strategy.
Rolland is also encouraged by Coherent's financial targets for FY 2025, which include projected revenue growth of 23%, adjusted gross margins of 38%, and adjusted operating margins of 17.8%. Furthermore, the company is expected to achieve a compound annual revenue growth rate (CAGR) of 10% to 15% over the next three to four years.
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.
While we acknowledge the potential of COHR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than COHR and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
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