Citi analyst Papa Sylla raised the price target on Lumentum (NASDAQ: LITE) to $1,200 from $1,100, while maintaining a Buy rating on the stock.

The revision follows Lumentum's quarterly results, in which June-quarter sales and earnings per share came in 2% and 9% above estimates, respectively. The September-quarter sales and EPS guidance also exceeded Wall Street estimates by 9% and 16%.

Sylla cited management commentary on three areas: optical circuit switching on track to deliver more than $400 million in the second half of 2026, an unchanged co-packaged optics timeline with near-packaged optics opportunity added on top, and laser demand remaining more than 30% above supply.

Following the results, Citi raised its sales estimates for Lumentum by 6% and 13% for fiscal years 2027 and 2028, respectively. The firm also revised its EPS estimates up by 9% and 17% for the same periods.

The new $1,200 price target is based on a 35x price-to-earnings multiple applied to Citi's fiscal year 2028 earnings estimate of approximately $37 per share, discounted back. The firm previously applied a 40x multiple, which it reduced to reflect peer-group de-rating.