This post was originally published on this site
https://i-invdn-com.investing.com/news/LYNXNPEC490X1_M.jpg
Analysts said the firm still likes the stock over the long term, but its recent performance captures the near-term upside.
“While the company is exposed to both cloud and service provider themes, we think near-term upside opportunity, including AI/ML is now largely captured in valuation post recent-run (~23% in L1M), with floating leverage exposure capping valuation upside in FY24,” explained the analysts.
The investment bank’s original Overweight thesis on COHR from December 2022 was predicated around a diversified portfolio of growth opportunities alongside an attractive valuation.
“While we continue to believe in these longer-term growth opportunities, we are stepping to the sidelines on the name over the near/medium term. Reason being, we think recent 20%+ run in L1M (trading at ~20x CY24e P/E) more than captures incremental upside from AI/ML opportunity in NT, and further re-rating largely limited by macro exposure and floating rate debt exposure,” the analysts added.
Even so, the analysts commented that the AI opportunity for the transceiver market remains significant, and they feel COHR is best positioned to capitalize while the company also maintains the broadest transceiver portfolio in the market.
