What happened
Laser company Coherent (COHR 1.50%) wasn't very sharp on the stock exchange this week. Across the five trading days, according to data compiled by S&P Global Market Intelligence, the company's share price fell by more than 16%. That wasn't entirely surprising, as the company was hit by not one, but two analyst price-target cuts.
So what
On Tuesday, heavyweight investment bank Morgan Stanley wielded the first pair of scissors. That company's Meta Marshall reduced her level on Coherent rather drastically, to $43 per share from the preceding $59. Despite the deep cut, Marshall is maintaining her equalweight (i.e., neutral) recommendation on the stock.
One day later, Marshall was followed by her peer Richard Shannon at Craig-Hallum. Not to be outdone, that prognosticator made a nearly 40% reduction to his Coherent price target. He now feels it's worth $50 per share, while previously he had pegged it at $80. Like Marshall, he's maintaining his recommendation; only in his case, it's a buy.
Shannon's adjustment is based on his take of the current macroeconomic and geopolitical environments, which still look dicey, in addition to recent checks of the type of clients that would utilize Coherent products. These checks indicate weakening demand, particularly at large-scale enterprise customers. He also foresees weakness in the telecom segment.
Now what
As a result, the Craig-Hallum analyst lowered his estimates for Coherent's latest quarters in addition to several future periods.
His keeping the buy recommendation intact is telling, however, and indicative of the continued optimism several analysts tracking the stock maintain. Collectively, while they anticipate a slight dip in per-share profitability this fiscal year, they believe the company will boost earnings by over 25% in the following one.
