Lumentum (LITE) PT Raised to $500 at Aletheia Capital

Aletheia Capital analyst Skye Chen raised the price target on Lumentum (NASDAQ: LITE) to $500.00 (from $330.00) while maintaining a Buy rating.

The analyst comments "We revise up our TP to US$500 (37x PER FY28E) from US$330 (35x) reflecting significant EPS revisions and multiple expansion. The earnings upgrade is due to significantly stronger EML demand, driven by both volume and 800 Gbps switch bandwidth from 2025 to 2028. The faster transition to a 200 Gbps SerDes/laser‑diode further expands LITE’s market share, while EML pricing shows sharper momentum, with increases of 15–20% and 5–7% in the Dec‑Q25 and Mar‑Q26, respectively. The risk to InP-substrate supply from AXT appears limited as JSR and Sumitomo hold 6–12 months of inventory. InP-substrate vendors are also qualifying new Australian suppliers to reduce the export control risk from China. OCS potential TAM is bigger as the OCS‑to‑TPU rack ratio could be 3:1 vs previous assumption of 5:1. We revise up EPS by 20–40% and now expect EPS to double from FY26E to FY28E. With ROE rising over40%, we also raise our target FY28 P/E multiple to 37x from 35x."

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