Raymond James Upgrades Lumentum (LITE) to Strong Buy

(Updated - March 24, 2025 6:45 AM EDT)

Raymond James analyst Simon Leopold upgraded Lumentum (NASDAQ: LITE) from Outperform to Strong Buy with a price target of $82.00 (from $96.00).

The analyst comments "We upgrade Coherent and Lumentum to Strong Buy from Outperform following Nvidia’s GTC and Corning’s analyst day meetings. We believe concerns over Co-Packaged Optics (CPO) are overblown, which has pressured the stocks, and update/expand/extend our proprietary datacom optical model for strong 800G demand, Nvidia’s roadmap, emerging CPO/LPO form-factors, as well as non-A.I. datacom estimates. Our new model forecasts $22.2B in A.I. backend transceiver sales by 2030, representing a ~30% CAGR vs. 2024. Our new 2027 estimate for A.I. backend is $7.5B vs. $7.1B previously. Given Nvidia’s Blackwell order disclosures, we see upside to near-term 800G estimates (we model 15M units in 2025). In addition, the optical telecom market, which includes wide area network applications such as data center interconnects, has started to recover, while industrial lasers are bottoming, with sub-sectors facing varied recovery trajectories. With Coherent and Lumentum stocks under pressure into the OFC trade show this year, we anticipate greater clarity on CPO and the market opportunity overall could provide a positive catalyst."

For an analyst ratings summary and ratings history on Lumentum click here. For more ratings news on Lumentum click here.

Shares of Lumentum closed at $66.61 yesterday.

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