Mizuho Reiterates Outperform Rating on Lumentum (LITE)

Mizuho analyst Vijay Rakesh reiterated an Outperform rating and $1,140.00 price target on Lumentum (NASDAQ: LITE).

The analyst comments "After the market close, Bloomberg reported (LINK) that MRVL (~$226B market cap) is in advanced discussions to acquire LITE (~$83B market cap). We highlight: 1) Bloomberg noted currently no terms or valuation available, 2) a look at the 10 largest public semi deals in the last 15 years (Exhibit 1) shows an average 7x LTM P/S multiple (3-24x range); more importantly, an average ~38% PREMIUM to current stock price which implies a ~$1,260+ offer, 3) LITE should command a premium as a leader in the EML/CW InP laser market, estimated at ~$60B by 2030E, driving a major optical transition in the Data Center, trading at 13x LTM P/S and 42x F27E P/E. Reiterate Outperform and PT of $1,140, at 0.6x F28E PEG; we calculate potential upside to $1,260+, as LITE remains well positioned with a strong, InP EML/CW laser and OCS moat and a key enabler as AI interconnects transition."

For an analyst ratings summary and ratings history on Lumentum click here. For more ratings news on Lumentum click here.

Shares of Lumentum closed at $913.95 yesterday.

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