Apr. 6 at 1:44 PM
$COHU
Disclosure: I currently have a long position in COHU.
Attached is page 1 of a 5-page Stifel analyst report on COHU from Thursday (4/3) entitled:
"COHR: OFC Key Takeaways"
Stifel has a 'Buy' rating on COHU with a
$120 price target.
Stifel's 'Summary' statement regarding COHU in the report is as follows:
"On Tuesday, April 1st, at OFC 2025, we met with COHR management including CSO and President of Materials Giovanni Barbarossa, CMO Sanjai Parthasarathi and SVP, IR Paul Silverstein. The meeting focused on high-level thematic discussions around contextually prevalent topics including the nuances of CPO, IMDD vs. Coherent-Lite, COHR's approach toward being best positioned for incremental and rapid technology evolution and the likes. We offer our takeaways below and note that management is hosting an Investor Day on May 28th in New York which should offer longer-term quantitative assumptions."
Stifel's 'Investment Thesis' regarding COHU is stated as follows:
"Our Buy rating on COHR is based on our expectation for the company to gain share as a critical supplier of materials and components in key growth markets, such as 5G, 400G switching, 200G to 800G optical, defense modernization and next-gen auto. We expect these gains to drive revenue growth above industry peers, thereby leading to positive estimate revisions and multiple expansions over the longer term.
Stifel's 'Target Price Methodology/Risks' regarding COHU is stated as follows:
"Our
$120 target price for COHR is based on 27x our FY26E EPS of
$4.50. Our 27x P/E multiple assumption is above the company's five year multiple range but warranted, in our view, ahead of renewed focus on margin expansion and delevering the company's balance sheet.
In addition to general market and macroeconomic risks, for COHR, we focus on risks associated with managing the challenging pricing dynamics in the datacom transceiver market, the company's reliance on China as an end-market, substantial FX exposure, the company's debt load, and technology risk associated with keeping pace in a rapidly changing market."
