In a report released today, Tim Savageaux from Northland Securities maintained a Buy rating on Lumentum Holdings (LITE), with a price target of $64. The company’s shares closed yesterday at $49.66.
Savageaux wrote:
“We believe guidance yesterday from key supplier IQE implies 3DS revenue levels 50% above previous peaks, enabling annualized 3DS VCSEL device capacity of $550M+ in CY19 which is set to increase by ~30% by year end. This compares to LITE CY19 3DS revenue ests of $400M, up 10% Y/Y, and FY20 ests of $435M, once again leaving plenty of room for any share loss scenario. Our estimate of IQE’s capacity is closer to our nearly $500M est of the AAPL TAM in FY20, assuming a large decline in LITE’s share to the high 60’s. despite little evidence of scale competition. Android revs bring our TAM to ~$800M with LITE’s combined share just over 50%. We expect our 3DS ests to move higher, along with a discounted valuation as concerns over share loss and overall AAPL volatility, which have evaporated from the entire AAPL ecosystem (save LITE) including AAPL itself, dissipate.”
According to TipRanks.com, Savageaux is a 4-star analyst with an average return of 6.1% and a 55.4% success rate. Savageaux covers the Consumer Goods sector, focusing on stocks such as DASAN Zhone Solutions Inc, Acacia Communications, and Luna Innovations Inc.
Currently, the analyst consensus on Lumentum Holdings is a Strong Buy with an average price target of $64.89, which is a 30.7% upside from current levels. In a report issued on March 7, Rosenblatt Securities also maintained a Buy rating on the stock with a $80 price target.
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Lumentum Holdings’ market cap is currently $3.78B and has a P/E ratio of 40.01. The company has a Price to Book ratio of 2.42.
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.
