Bernstein: Optical Module Pullback Does Not Alter Fundamentals; Coherent Revenue Expectations Beat Consensus

Bernstein assesses that the pullback catalyst has not changed the fundamentals of optical modules, maintaining Outperform ratings for both companies with target prices of $1,220 for Lumentum and $350 for Coherent. Coherent's Q1 revenue and EPS both exceeded consensus estimates, and it may raise guidance in Q2; Lumentum's Q1 results closely matched the midpoint of guidance, and it may also see an upgrade in Q2. Following the narrowing valuation gap, preference for the two stocks has shifted toward a balanced stance.