Analysts Offer Insights on Consumer Goods Companies: Xcerra (LITE) and Lumentum Holdings (LITE)

Companies in the Consumer Goods sector have received a lot of coverage today as analysts weigh in on Xcerra (NASDAQ: XCRA) and Lumentum Holdings (NASDAQ: LITE).

Xcerra (NASDAQ: XCRA)

In a report released today, Craig Ellis from B.Riley FBR reiterated a Hold rating on Xcerra (NASDAQ: XCRA), with a price target of $14. The company’s shares opened today at $13.55, close to its 52-week high of $13.80.

Ellis wrote:

“We expect back-end analog test and handler specialist Xcerra (XCRA) to report F3Q18 results on but we do not expect a CC, nor F4Q18 guidance, due to the pending Cohu (COHU) acquisition. On 5/8, XCRA agreed to COHU’s $13.92/$796M equity and $627M enterprise value offer. We believe the offer represents good value for long-term shareholders, with the offer price 36% above XCRA’s previously accepted, but unconsummated, Unic Capital offer. The combined portfolios will span handlers, contactors, inspection, and test, with a robust position in applications like auto, industrial, mobility, and IoT. We estimate CY19/20 EPS accretion of $1.00+ and $1.50+, which, given the relatively modest target synergies (2.8% of total expenses), indicates XCRA’s inherent profitability.”

According to TipRanks.com, Ellis is a top 25 analyst with an average return of 38.2% and a 80.7% success rate. Ellis covers the Consumer Goods sector, focusing on stocks such as Silicon Laboratories, Applied Materials, and Brooks Automation.

Currently, the analyst consensus on Xcerra is Moderate Buy and the average price target is $14, representing a 3.3% upside.

In a report issued on May 8, D.A. Davidson also downgraded the stock to Hold.

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Lumentum Holdings (NASDAQ: LITE)

B.Riley FBR analyst Dave Kang assigned a Buy rating to Lumentum Holdings (NASDAQ: LITE) yesterday and set a price target of $83. The company’s shares opened today at $62.85.

Kang noted:

“the market close, LITE (Buy, $83 PT) filed an S-4 regarding its transaction to acquire Oclaro Inc. (OCLR-Neutral, $9.50 PT). We believe there are three key items from the filing to take away, all culminating in our increased confidence that the deal appears to remain on track, despite recent posturing between China and the US over potential trade war, with which ZTE (763-HKG) is being used as a bargaining chip.”

According to TipRanks.com, Kang is a 5-star analyst with an average return of 18.4% and a 64.1% success rate. Kang covers the Consumer Goods sector, focusing on stocks such as Applied Optoelectronics, Acacia Communications, and Finisar Corp.

Currently, the analyst consensus on Lumentum Holdings is Strong Buy and the average price target is $81.50, representing a 29.7% upside.

In a report issued on May 3, Drexel Hamilton also maintained a Buy rating on the stock with a $85 price target.

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