Barclays says Lumentum Holdings’ value could double in 2026, but it remains attractive despite the recent selloff, making it a good buy. The bank upgraded the optical and photonics technology maker from equal weight to overweight. The company maintains a $1,000 price target, implying a 36% upside from Friday’s closing price. The stock is up nearly 100% since the beginning of the year, significantly outpacing the S&P 500’s 8.9% rise in that time. But the stock has fallen 18% in the past three months as investors question whether demand for the company’s suite of optical-based technologies for the artificial intelligence industry will persist. iShares Semiconductor ETF (SOXX). SOXX is up 25% over the same period. LITE 3M Mountain stock has fallen 18% in the past three months. Analyst Tom O’Malley said the stock should rebound as investors digest the latest information about Lumentum’s business and the broader semiconductor industry that will be released this fiscal year. “LITE has underperformed the (SOXX ETF) by approximately 40% over the past three months, and we have seen multiple compressions in the theory that scale-up (co-packaging of optical components) is somehow being pushed out,” O’Malley said in a note to clients on Monday. “Nothing has changed…the underlying fundamentals for transceiver/laser demand remain strong, and we like the risk/reward on a pullback.” He added, “We believe commentary on positive corrections around wafer allocation, memory sourcing capabilities, and long-term (overall addressable markets) will move the stock more than ups and downs.” “The ‘now’ is far less important than the ‘then’. That is the theme heading into this financial year, and while positive stock price movement is difficult to achieve, we expect strong numbers overall.” Lumentum is scheduled to announce its fourth quarter results on August 11. Barclays’ demands are in line with Wall Street consensus. Of the 27 analysts covering Lumentum, 22 rate the stock as a “buy” or “strong buy,” according to LSEG data.
