Why Coherent Stock Was Skating Higher This Week
Coherent's (NYSE: COHR) stock began this week on a high note, and as we headed toward the weekend it wasn't letting up much. What helped was news of a bullish initiation of coverage from an analyst, a share-price-supporting event if ever there was one. Investors piled into the company's shares to push their price nearly 9% higher week to date as of late night Thursday, according to data compiled by S&P Global Market Intelligence.
That's one positive pundit
The latest addition to Coherent's bull herd is Jefferies' George Notter, who launched coverage of the stock with a unambiguous buy recommendation at a price target of $135 per share. That anticipates a potential gain of 24% over the shares' most recent closing level.
According to reports, Notter's optimism centers on the company's new(ish) CEO, Jim Anderson, and his efforts to streamline and restructure the business. In the analyst's view Coherent is something of a patchwork of acquisitions, and it has many operational areas that could use some trimming. In his inaugural note on Coherent, the pundit cited areas such as real estate holdings and factories.
Notter went on to write that prior to Anderson's arrival, the company had spent hundreds of millions of dollars on restructuring efforts that haven't borne fruit.
Work to be done
Coherent's hiring of Anderson was a badly needed shot in the arm for the company, especially since the executive was quite well regarded for his tenure as CEO of chip company Lattice Semiconductor. It could use some effective and disciplined leadership, as it has posted losses in four of the last five quarters and is still quite a sprawling enterprise.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group. The Motley Fool recommends Coherent. The Motley Fool has a disclosure policy.
