Coherent Corp. heads into mid-May with one of the sharpest short covering moves of the past month, a wave of post-earnings analyst upgrades, and a stock that has climbed 21% in a single month — creating a meaningful gap between where the price trades and where much of the Street still has its targets set.
The positioning shift is the week's headline story. Short interest in COHR dropped 15% over the past week and 15.5% over the past month, falling to roughly 4.1% of the free float — its lowest reading in over 30 days. Six weeks ago SI was running closer to 4.8-4.9% of float, and in early April it touched above that level. The covering has been swift and concentrated: most of the move happened in the three sessions following the May 6 earnings release, when the position dropped from 4.8% to around 4.1% in two days. Borrow availability remains tight at 66.8% — technically in the "tight" range — but conditions have not deteriorated further despite the stock's rally. Cost to borrow is low at 0.34%, and the ORTEX short score has eased from 36 to 33.8 over the past two weeks, confirming the broadly de-risked short positioning.
Options tell a roughly neutral story. The put/call ratio is running at 1.04, barely above its 20-day average of 1.02 and less than a third of a standard deviation from the mean. That is not a defensively positioned market — no unusual demand for puts relative to recent norms. What is worth noting is the directional shift in the PCR over the past six weeks: it ran as low as 0.71 in early April (when the stock was under pressure), climbed sharply into the high 1.1s during late April's uncertainty, and has since drifted back toward neutral as the price rallied. Options traders have broadly unwound their hedges.
The analyst reaction to the May 6 earnings has been uniformly bullish. Multiple firms lifted targets in the days immediately after the print — TD Cowen raised to $395 from $340, Rosenblatt moved to $425 from $375, and Stifel made an aggressive move to $412 from $275. Rothschild initiated at Buy with a $455 target in late April. The cluster of raises stands in contrast to the more cautious Morgan Stanley, which held its Equal-Weight rating and lifted its target to only $290 — a reading that now sits 22% below the current price and roughly $100 below the bull-case consensus. The mean price target across the Street is $377.93, now just 1% above the current $374 close. With multiple Buy-rated targets sitting at $395-$455, the aggregate number has not yet caught up to the Street's most optimistic voices — and may move higher as more firms update following the print. The bull case centres on Coherent's datacom and AI connectivity exposure and the ramp of its indium phosphide capacity; the bear case flags limited InP capacity relative to the largest peers, FX exposure and debt load as ongoing constraints. On valuation, the stock trades at 58.6x trailing earnings and 40.8x EV/EBITDA — multiples that have expanded materially over the month, with EV/EBITDA down 3.7 turns over 30 days as EBITDA has grown faster than the stock, even as the PE ratio has climbed nearly 7 points. EPS momentum scores are strong — ranking in the 73rd and 67th percentiles on 30- and 90-day windows respectively — while the EV/EBIT score at the 8th percentile flags stretched absolute valuation.
On the ownership side, the latest data shows broad institutional accumulation. FMR (Fidelity) is the largest holder at 11.4% and added 598,000 shares through April. Vanguard and BlackRock each added meaningfully in the most recent reporting period — Vanguard by 4.8 million shares, BlackRock by 2.4 million. State Street Global Advisors added 2.2 million shares. The lone notable trimmer among major holders is Bain Capital, which cut its stake by 18.1 million shares to 5% of the company as of December — a significant reduction, though the data is several months old. Insider activity has been entirely on the sell side, with the CFO selling 2,000 shares in late April and a cluster of director sales in March, all at prices well below current levels. The net 90-day insider flow of roughly $5.6 million sold is modest relative to market cap and carries little signal weight at the current valuation.
The stock gave back 1.5% on Tuesday to close at $374, while close peers LASR surged 25% on the week and GLW climbed 22% — a reminder that the photonics and connectivity trade has been broadly strong, not just a Coherent story. FN fell 3.9% on the week, diverging from the group. With no next earnings date yet set and the mean price target now sitting almost exactly at the current price, the key variable to watch is whether the remaining Bull-rated analysts update their models — and whether that brings the consensus target materially above $374 or leaves the stock running ahead of the Street's arithmetic.
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