What happened

Shares of Coherent (NASDAQ:COHR) gained 10.3% in December 2019, according to data from S&P Global Market Intelligence. The maker of industrial lasers and related systems inspired a bullish analyst report near the middle of the month, which sent share prices soaring.

Close-up shot of six high-powered lasers cutting through a sheet of steel.

Image source: Getty Images.

So what

Analyst firm Susquehanna upgraded Coherent from neutral to positive, lifting its price target from $130 to $200 per share. Analyst Mehdi Hosseini reminded investors that the firm had downgraded Coherent in April due to "deteriorating OLED-related bookings and uncertain Fiber Laser prospects." Those concerns had largely evaporated in December, as the analyst expects organic light-emitting diode (OLED) bookings to bounce back in 2020 and fiber laser sales should at least not get any worse at this point.

COHR Revenue (TTM) Chart

COHR Revenue (TTM) data by YCharts.

Now what

Coherent's stock has delivered a 56% return over the past 52 weeks despite weakening sales and earnings over the last few quarters. Analysts and investors alike are betting on a stronger market for industrial lasers in 2020, driven by stabilizing demand from Chinese manufacturing specialists along with rising demand for OLED displays. Coherent's laser-powered annealing tools play an important role in the manufacturing of OLED screens, allowing this company to benefit from the same market trends that helped OLED specialist Universal Display to double its share prices in 2019.

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