Lumentum (NASDAQ:LITE) Cut to Neutral at B. Riley Financial

Key Points

• B. Riley Financial downgraded Lumentum to “neutral” from “buy” while maintaining a $770 price target, implying 12.51% upside from the prior close. The broader analyst consensus remains “Moderate Buy,” with an average target of $1,085.08.
• Lumentum reported adjusted quarterly EPS of $4.57, beating the $4.22 consensus estimate, while revenue reached approximately $1.26 billion, up 136.5% year over year and in line with expectations.
• The proposed all-stock combination with Marvell values Lumentum at roughly $115 billion in enterprise value, but investors have raised concerns about dilution, valuation, integration risks and the durability of AI infrastructure spending.

Lumentum (NASDAQ:LITE - Get Free Report) was downgraded by research analysts at B. Riley Financial from a "buy" rating to a "neutral" rating in a research note issued to investors on Tuesday, Briefing.com reports. They presently have a $770.00 price target on the technology company's stock. B. Riley Financial's price target would indicate a potential upside of 12.51% from the company's previous close.

LITE has been the topic of several other reports. Needham & Company LLC reiterated a "buy" rating and issued a $1,040.00 target price on shares of Lumentum in a report on Wednesday, August 12th. Morgan Stanley boosted their price target on shares of Lumentum from $900.00 to $1,000.00 and gave the company an "equal weight" rating in a report on Wednesday, August 12th. Weiss Ratings cut shares of Lumentum from a "hold (c-)" rating to a "sell (d-)" rating in a research report on Wednesday, August 19th. Bank of America lowered their price objective on shares of Lumentum from $1,100.00 to $1,000.00 and set a "neutral" rating for the company in a research report on Wednesday, August 12th. Finally, Wolfe Research reaffirmed an "outperform" rating on shares of Lumentum in a research note on Friday, August 21st. Two analysts have rated the stock with a Strong Buy rating, fourteen have issued a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $1,085.08.

Lumentum Stock Performance

Shares of LITE stock opened at $684.40 on Tuesday. The company has a debt-to-equity ratio of 0.01, a current ratio of 1.68 and a quick ratio of 1.40. The stock has a market cap of $61.99 billion, a PE ratio of -8.33 and a beta of 1.53. The stock has a 50-day moving average of $919.26 and a 200-day moving average of $796.61. Lumentum has a one year low of $184.20 and a one year high of $1,143.00.

Lumentum (NASDAQ:LITE - Get Free Report) last announced its quarterly earnings results on Monday, November 2nd. The technology company reported $4.57 earnings per share for the quarter, beating analysts' consensus estimates of $4.22 by $0.35. Lumentum had a negative net margin of 230.15% and a positive return on equity of 26.34%. The business had revenue of $1.26 billion for the quarter, compared to the consensus estimate of $1.26 billion. During the same period last year, the company posted $1.10 EPS. Lumentum's revenue for the quarter was up 136.5% on a year-over-year basis. As a group, sell-side analysts expect that Lumentum will post 19.79 earnings per share for the current year.

Insider Buying and Selling

In other news, insider Yuen Wupen sold 307 shares of the company's stock in a transaction that occurred on Tuesday, September 29th. The shares were sold at an average price of $945.00, for a total value of $290,115.00. Following the completion of the transaction, the insider owned 108,320 shares in the company, valued at $102,362,400. This represents a 0.28% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Wajid Ali sold 24,542 shares of the company's stock in a transaction that occurred on Thursday, October 1st. The shares were sold at an average price of $1,048.50, for a total transaction of $25,732,287.00. Following the completion of the transaction, the chief financial officer owned 75,074 shares of the company's stock, valued at $78,715,089. This trade represents a 24.64% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 94,496 shares of company stock valued at $85,978,498. 0.28% of the stock is owned by company insiders.

Institutional Investors Weigh In On Lumentum

Several institutional investors have recently added to or reduced their stakes in LITE. Sachetta LLC increased its holdings in Lumentum by 118.8% during the 1st quarter. Sachetta LLC now owns 35 shares of the technology company's stock worth $25,000 after purchasing an additional 19 shares in the last quarter. Burkett Financial Services LLC bought a new stake in shares of Lumentum in the third quarter valued at about $28,000. Putney Financial Group LLC bought a new stake in shares of Lumentum in the third quarter valued at about $28,000. Signature Equity Partners LLC lifted its holdings in shares of Lumentum by 220.0% in the third quarter. Signature Equity Partners LLC now owns 32 shares of the technology company's stock valued at $31,000 after purchasing an additional 22 shares in the last quarter. Finally, Meeder Asset Management Inc. acquired a new position in shares of Lumentum during the second quarter worth about $40,000. 94.05% of the stock is owned by institutional investors.

More Lumentum News

Here are the key news stories impacting Lumentum this week:

• Positive Sentiment: Lumentum beat fiscal first-quarter expectations, reporting $4.57 in adjusted EPS versus the $4.22 consensus estimate. Revenue was approximately $1.26 billion, up 136.5% year over year and in line with forecasts. Lumentum Beats Q1 Earnings and Revenue Estimates
• Positive Sentiment: The proposed combination would unite Marvell’s custom silicon and networking technology with Lumentum’s optical components, creating a larger AI-data-center connectivity platform and potentially giving the combined company greater scale in a rapidly expanding market. Marvell and Lumentum to Combine
• Neutral Sentiment: The transaction would be financed entirely with stock. Lumentum shareholders would receive 4.5 Marvell shares per Lumentum share and own about 33% of the combined company; the deal carries an implied enterprise value of roughly $115 billion, including debt. Its final value will fluctuate with Marvell’s share price. Marvell Buys Lumentum for $115 Billion
• Negative Sentiment: Investors appear concerned that Marvell is paying an aggressive price at a time when the AI infrastructure boom is facing questions about spending durability and returns. Analysts have cited dilution, limited near-term upside and integration risk, while comparisons with past technology bubbles have further pressured the shares. Stocks Downgraded on Merger Concerns
• Negative Sentiment: Shareholder-rights law firms are investigating whether Lumentum is receiving a fair price and whether insiders’ interests or deal restrictions could limit competing offers. These reviews add uncertainty around approval and completion. Lumentum Shareholder Investigation

About Lumentum

Lumentum Holdings Inc is a technology company that designs and manufactures optical and photonic products for communications networks, industrial applications, and consumer electronics. Its portfolio includes optical components, modules, and subsystems used in fiber-optic networks, data centers, cloud computing infrastructure, telecommunications equipment, and high-speed connectivity systems.

The company also develops laser products for applications such as industrial processing, sensing, three-dimensional imaging, and other specialized commercial and consumer uses.

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