Rosenblatt Securities Sticks to Its Buy Rating for Lumentum Holdings (LITE)

By Carrie Williams

In a report released today, Jun Zhang from Rosenblatt Securities reiterated a Buy rating on Lumentum Holdings (LITEResearch Report), with a price target of $80. The company’s shares opened today at $59.

Zhang said:

“We believe Lumentum’s earnings call supports our belief of strong demand in the telecom market for ROADM and pump lasers. In addition, we think Lumentum’s 3D sensing business increased its diversification as the company added Android clients. We believe Huawei contributed ~$10 million towards 3D sensing revenue. Although iPhone 3D sensing orders declined sequentially from C1Q to C2Q due to seasonality, which led to a q/q decline in 3D sensing revenues for LITE, we expect LITE’s 3D sensing business to rebound strongly in the second half of calendar year 2019. We also expect the iPhone to adopt new 3D sensing solutions with more VCSEL units in a smaller chipset in the 2nd half of 2019.”

According to TipRanks.com, Zhang is a 4-star analyst with an average return of 6.0% and a 59.7% success rate. Zhang covers the Consumer Goods sector, focusing on stocks such as Applied Optoelectronics, Viavi Solutions, and Synaptics Inc.

Currently, the analyst consensus on Lumentum Holdings is a Strong Buy with an average price target of $70.82, a 20.0% upside from current levels. In a report issued on April 22, Northland Securities also assigned a Buy rating to the stock with a $70 price target.

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Based on Lumentum Holdings’ latest earnings release for the quarter ending December 31, the company reported a quarterly net profit of $16.3 million. In comparison, last year the company had a net profit of $2.7 million.

Based on the recent corporate insider activity of 29 insiders, corporate insider sentiment is negative on the stock.

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Lumentum Holdings, Inc. engages in the manufacture of optical and photonic products enabling optical networking and commercial laser. It operates through the Optical Communications (OpComms) and Commercial Lasers business segments. The OpComms segment includes modules and subsystems to support and maintain customers in the Telecom and Datacom markets.