Northland Securities analyst Tim Savageaux maintained a Buy rating on Lumentum Holdings (LITE) today and set a price target of $70. The company’s shares closed on Thursday at $60.75.
Savageaux noted:
“We further reduce our FQ4 revenue ests as a result, with EPS unchanged given the low GMs and losses associated with the unit, and increase our PT to $70 reflecting both the higher margin profile of the remaining datacom chip revenue as well as further indications of both short and medium terms conservatism in 3DS estimates. Key Points The CIG deal was announced in early March at OFC, leading us to modestly increase our $80M reduction in revs and our PT to $64. We make modest additional cuts in revs as a result of the company’s guide but no changes to EPS, despite some positive offset in laser chip revs from a long term supply agreement between LITE and CIG, adding to an already substantial high margin OCLR datacom laser unit we estimate in the $10-15M/Q range.”
According to TipRanks.com, Savageaux is a 4-star analyst with an average return of 7.8% and a 57.5% success rate. Savageaux covers the Consumer Goods sector, focusing on stocks such as MACOM Technology Solutions Holdings Inc, DASAN Zhone Solutions Inc, and Acacia Communications.
Lumentum Holdings has an analyst consensus of Strong Buy, with a price target consensus of $68.80, implying a 13.3% upside from current levels. In a report issued on April 9, MKM Partners also reiterated a Buy rating on the stock with a $66 price target.
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Based on Lumentum Holdings’ latest earnings release for the quarter ending December 31, the company reported a quarterly net profit of $16.3 million. In comparison, last year the company had a net profit of $2.7 million.
Based on the recent corporate insider activity of 29 insiders, corporate insider sentiment is negative on the stock.
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Lumentum Holdings, Inc. engages in the manufacture of optical and photonic products enabling optical networking and commercial laser. It operates through the Optical Communications (OpComms) and Commercial Lasers business segments. The OpComms segment includes modules and subsystems to support and maintain customers in the Telecom and Datacom markets.
