Coherent Corp: Understanding Stock Movements and Future Outlook

Author: Evelyn Baker Updated: 08-14-2025 01:43 PM

Stock Movement Overview for Coherent Corp

Coherent Corp. (NASDAQ: COHR) experienced a significant drop in share prices after announcing a major business decision. The company has decided to divest its aerospace and defense unit, selling it to Advent for $400 million. This move is aimed at reducing their overall debt and enhancing financial flexibility.

Financial Performance Insights

In addition to the divestiture announcement, Coherent reported quarterly earnings of $1 per share, surpassing the market's expectations of 91 cents. Revenue also showed an upward trend, reaching $1.52 billion, which is an increase from $1.31 billion in the previous year and exceeds the consensus estimate of $1.5 billion.

Analysts Recommendations

Analysts' perspectives on Coherent's stock have been varied.

Bank of America Securities Analysis

Analyst Vivek Arya from Bank of America has downgraded the stock from Buy to Neutral but increased the price target from $92 to $105. Arya has noted a mixed outlook for the company, especially pointing out that September-quarter growth for data centers has slowed, highlighting concerns about gross margins falling below the critical 40% level needed for valuation expansion.

JPMorgan's Perspective

On the other hand, JPMorgan analyst Samik Chatterjee maintained an Overweight rating with a target price of $127. Chatterjee believes that although there may be short-term challenges due to customer buying patterns, Coherent's growth will accelerate in the datacom sector as they ramp up shipments with key customers.

Future Business Strategy and Market Position

Coherent aims to enhance its market position by shifting its focus towards higher-margin business areas. The sale of the aerospace segment is viewed as a strategic move to improve gross margins. Additionally, reducing debt will allow the company to invest more in areas such as optical circuit switches and AI-driven products, which are projected to be significant growth areas. With a compound annual growth rate (CAGR) forecasted to exceed 25% in earnings per share between the fiscal years of 2025 to 2028, the company has positioned itself for strong performance long-term.

Current Stock Performance

As of the latest evaluations, COHR shares are trading at approximately $86.81, reflecting a decrease of about 23.74%. This downturn can be attributed to the market's reaction to the divestiture and the overall mixed signals from analysts regarding the company's immediate future.

Frequently Asked Questions

What led to Coherent Corp's stock price drop?

The stock price fell significantly due to the announcement of the divestiture of its aerospace and defense unit, which caused investor concern.

How did Coherent Corp perform financially last quarter?

Coherent reported earnings of $1 per share, beating estimates, and achieved revenue of $1.52 billion, up from $1.31 billion in the same quarter last year.

What are analysts saying about Coherent Corp's future?

Analysts have mixed opinions. Some downgrade their ratings citing concerns about growth and margins, while others maintain strong buy recommendations based on long-term growth prospects.

How will the sale impact Coherent’s growth?

The sale is expected to help Coherent reduce debt and improve margins, enabling it to focus on areas with higher profitability.

What is Coherent Corp's strategy moving forward?

The company plans to diversify into higher-margin areas and enhance its shareholder value through strategic investments and reducing overall financial burdens.

About The Author

Greetings, I'm 32-year-old author and financial specialist Evelyn Baker. My introduction into the financial industry started with an economics degree and continued with a wealth of experience in wealth management and financial consulting. My great passion over the years has been assisting people and companies in making wise, well-informed decisions to reach their financial objectives.

My goal with writing is to simplify difficult financial ideas into understandable, doable guidance. My goal in writing many books and articles is to make personal finance understandable to everyone, irrespective of their experience or background. I want to give readers the information they need to take charge of their financial futures, from investing and retirement planning to budgeting and saving.

Along with my writing, I lead webinars and workshops where I provide doable advice and methods for achieving financial success. To reach a larger audience, I also frequently contribute to financial blogs and publications. My method is always to offer doable, real-world guidance that can actually improve people's lives.

Aside from my job, I like to cook, travel, and experience other cultures. I work hard to apply my belief in the value of a balanced life to my financial counsel. My goal in working is to encourage and enable people to succeed financially so they may lead the best lives possible.

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