Lumentum Holdings (LITE) may not have the most attractive chart.

But keep an eye on it. 

According to JP Morgan, Wall Street is being far too pessimistic – upgrading the stock to an overweight rating.  They also raised their price target to $60 from $54, noting the stock only trades at 11x 2023 earnings, and 8x 2024 earnings.

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Analyst Samik Chatterjee also expects to see upside to company EPS as the company uses its balance sheet to buy back stock, “despite worries about lower revenues from Sony entering the 3D Sensing market.” He added, “To that end, we are risk-adjusting our revenue estimates further for potential share and revenue loss to Sony in 3D Sensing, but our earnings estimate for [fiscal 2025] rises on account of a higher likelihood of the company utilizing the flexibility on its balance sheet and the remaining $500 [million] of the buyback authorization to repurchase ~15% of the current market capitalization within a 2-year period.”


Ian Cooper