Key Takeaways
- Lumentum shares rose 3% today after StoneX initiated coverage with a Buy rating and a $1,200 price target.
- StoneX’s target matches the median Wall Street target, and the recent pullback makes the stock look like a reasonable buy ahead of earnings.
- Analysts expect Lumentum’s normalized EPS to climb from $8.67 in fiscal 2026 to $35.92 in fiscal 2028, and management says its parts are effectively sold out through early 2029.
- The next test is the fiscal first-quarter report on Nov. 5, where the laser-chip shortage needs to hold up.
Lumentum Holdings (LITE) shares are up 3% this morning after StoneX initiated coverage with a Buy rating and a $1,200 price target.
StoneX’s case is about supply. The firm says Lumentum occupies “critical scarcity points” across high-speed indium phosphide lasers and cloud transceivers, and it notes the company is sold out into 2029.
The call comes after a rough few weeks. Shares have slid well off their $1,143 peak this month, and the CFO sold $25.7 million of stock along the way.
StoneX’s target matches the Street’s
StoneX’s $1,200 is the median of the 27 price targets on Lumentum, a bit above the $1,165 consensus. That consensus has grown more than sevenfold since October 2025, when it stood at $161.
On Friday the stock closed just above the Street’s lowest target, $750. That leaves StoneX’s $1,200 more than 50% above the share price.
TIKR tracks 27 analysts on Lumentum. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Lumentum, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Lumentum’s Analyst Ratings
The pullback made the stock cheaper
The target depends on earnings, and analysts expect a lot more of them. Normalized EPS jumped from $1.01 in fiscal 2024 to $8.67 in fiscal 2026 (the year to June 2026). Consensus calls for $21.79 in fiscal 2027 and $35.92 in fiscal 2028.
Lumentum’s CEO said this month that its parts are effectively sold out through early 2029, and that new laser capacity takes about three years to build. StoneX is betting on that scarcity.
Meanwhile, the pullback has brought the multiple down. At Friday’s close, Lumentum traded at 35x forward earnings.
That’s below its three-year average of 40x and less than half its 80x peak in May. (At today’s price it’s closer to 36x.)
Earnings come Nov. 5
Lumentum reports fiscal first-quarter results after the close on Nov. 5. Management guided for revenue of $1.225 billion to $1.275 billion and non-GAAP EPS of $4.05 to $4.35. The laser-chip shortfall matters just as much: management last put it at more than 30% of demand.
The risk is that the scarcity fades. Lumentum’s revenue fell 23% in fiscal 2024 when customers cut inventory, and today’s margins depend on laser chips staying hard to get.
My take: StoneX’s call asks for nothing the rest of Wall Street doesn’t already expect. And after the pullback, the stock trades below its three-year average multiple while estimates keep rising. That makes this a reasonable spot to buy ahead of earnings. Of course, if the November report shows the supply gap narrowing, that multiple will look a lot less cheap.
So what is Lumentum stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
