Earnings Update: Here's Why Analysts Just Lifted Their Coherent Corp. (NYSE:COHR) Price Target To US$80.63

The investors in Coherent Corp.'s (NYSE:COHR) will be rubbing their hands together with glee today, after the share price leapt 21% to US$76.63 in the week following its full-year results. The statutory results were not great - while revenues of US$4.7b were in line with expectations,Coherent lost US$1.84 a share in the process. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Coherent

Taking into account the latest results, the consensus forecast from Coherent's 15 analysts is for revenues of US$5.43b in 2025. This reflects a solid 15% improvement in revenue compared to the last 12 months. Coherent is also expected to turn profitable, with statutory earnings of US$0.23 per share. In the lead-up to this report, the analysts had been modelling revenues of US$5.44b and earnings per share (EPS) of US$0.45 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 14% to US$80.63, suggesting the revised estimates are not indicative of a weaker long-term future for the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Coherent, with the most bullish analyst valuing it at US$90.00 and the most bearish at US$50.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Coherent shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Coherent's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.4% annually. So it's pretty clear that, while Coherent's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Coherent going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Coherent that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.