Lumentum downgraded by Raymond James ahead of earnings

Lumentum (LITE) was downgraded by Raymond James on Friday, ahead of the company's fiscal first-quarter earnings release on Nov. 4.

“We downgrade our rating to a still favorable Outperform from Strong Buy on LITE,” analyst Simon Leopold wrote in a note to clients. “We remain upbeat regarding the longer-term trends, which encourages us to maintain the favorable rating, but our intermediate term estimates now lie near consensus, and we prefer Coherent’s (COHR) set-up into the quarter.”

Leopold lowered his rating on Lumentum to Outperform from Strong Buy, but upped his price target to $220 from $145.

Delving deeper, Leopold said he expects Lumentum to reach the $600M revenue figure a quarter earlier than previously believed, in the March 2026 quarter. He also expects Lumentum to hit $700M in revenue in the September 2026 quarter. As such, it's likely other analysts will raise their estimates too, Leopold added. 

“Lumentum had an operating margin of 20% and FY19- FY22 and returns to these levels with laser chips taking the place of iPhones in the model. Importantly, we expect the optical [total addressable market] grows with a 45% CAGR CY25-CY30,” Leopold added.