Lumentum (LITE) PT Raised to $125 at Needham & Company; Stock Should Go Up on NeoPhotonics Deal

Needham & Company analyst Alex Henderson raised the price target on Lumentum (NASDAQ: LITE) to $125.00 (from $105.00) while maintaining a Buy rating and said the stock should go up on the NeoPhotonics deal.

The analyst commented, "Stocks often go down on acquisitions, but we think LITE should go up. An all cash deal with strong synergies that's immediately accretive and has $50 million plus in cost savings should be seen as a clear positive by investors. LITE has a great track record on integrating completed acquisitions, particularly Oclaro, and this looks very similar. We think the deal gets done and do not expect alternative bidders to emerge. II-VI is the most logical alternative and its tied up with Coherent. Our upgrade on NPTN was predicated on this being the right window, as well as on the strong product momentum at Neo. Lumentum and Neo both printed numbers coming in at or above the high-end of the range and in the case of LITE raising CY4Q guidance despite 3D shifting more to the March quarter and other Supply constraints and cost pressures."

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