Bernstein: Valuation gap between Lumentum and Coherent widens; NPO may become an alternative to CPO

S, according to Chaoxiang Research, Bernstein’s October 12, 2026 research report points out that Lumentum (LITE) has an expected 2027 PE ratio of 49.3x, and Coherent (COHR) 32.9x; Bernstein maintains Outperform ratings on both, with price targets of $1,220 and $350, respectively; large-scale production of Co-Packaged Optics (CPO) by 2028 remains in doubt, while Near-Packaged Optics (NPO) may be ready by 2027.

Bernstein assesses that the risk of CPO delays is overpriced, with NPO serving as a viable alternative for vertical scaling of optical interconnects. Most long-term investors remain on the sidelines, while hedge funds debate intensely over CPO and NPO. Competition in Asia is intensifying, but the technological moat for high-power lasers remains secure. It is recommended to maintain long or overweight positions in Lumentum and Coherent.