Bernstein: Valuation gap between Lumentum and Coherent widens; NPO may become an alternative to CPO

According to Chaoxiang Research, a Bernstein research report dated October 12, 2026, indicates that Lumentum (LITE) carries a 2027 forward P/E multiple of 49.3x, while Coherent (COHR) sits at 32.9x; Bernstein maintains an Outperform rating on both names, with price targets set at $1,220 and $350, respectively; mass production of co-packaged optics (CPO) by 2028 remains uncertain, whereas near-packaged optics (NPO) may be ready by 2027. Bernstein assesses that the risk of CPO delays is overpriced, and NPO could serve as an alternative for longitudinally scaling optical interconnects. Most long-term investors remain on the sidelines, while hedge funds are engaged in intense debates surrounding CPO and NPO. Competition from Asia is intensifying, but the technological moat in high-power lasers remains intact. Investors are advised to maintain long or overweight positions in Lumentum and Coherent.