Market Overview

Analysts Forecast What's Next For Lumentum After The Oclaro Acquisition

Share:
Analysts Forecast What's Next For Lumentum After The Oclaro Acquisition

Lumentum Holdings Inc (NASDAQ: LITE) confirmed Monday that its acquisition of Oclaro is complete.

What Happened

Lumentum's finalized acquisition of Oclaro creates a new entity with greater scale in telecom and datacom markets, Barclays' Blayne Curtis said in a research report. The acquisition combines two optical companies into one, erasing the competitive threat the companies posed to each other.

The two companies will accelerate a combined roadmap with a more focused R&D spend and stronger financial profile, the analyst said. 

Why It's Important

Lumentum's acquisition of Oclaro is expected to shift its product mix, Raymond James' Simon Leopold said in a note.

As a standalone entity Lumentum's estimated calendar 2019 revenue breakdown is as follows, the analyst said:

  • Telecom: 42 percent.
  • 3-D: 35 percent.
  • Industrial lasers: 13 percent.
  • DataCom: 7 percent.
  • Other: 3 percent.

As a combined entity, the company's product mix is now likely to look like the following, Leopold said:

  • Telecom: 48 percent.
  • 3-D: 27 percent.
  • DataCom: 13 percent.
  • Industrial Lasers: 10 percent.
  • Other: 2 percent.

What's Next

Lumentum's acquisition could generate short-term synergies from SG&A savings as early as calendar 2019, Leopold said. The deal will likely prove to be complementary, with modest overlap, he said. 

Raymond James lifted its fiscal 2020 revenue estimates from $1.664 billion to $2.235 billion, while its EPS estimates moved higher from $5.64 to $5.81.

Related Links:

Should Investors Buy Lumentum After Monday's Plunge? The Street Debates

JPMorgan Finds Multiple Reasons To Turn Bullish On Lumentum

Latest Ratings for LITE

DateFirmActionFromTo
Aug 2019MaintainsOverweight
Jun 2019MaintainsOverweight
Mar 2019UpgradesEqual-WeightOverweight

View More Analyst Ratings for LITE
View the Latest Analyst Ratings

Posted-In: Barclays Blayne Curtis oclaro opticalAnalyst Color M&A News Analyst Ratings Best of Benzinga

 

Related Articles (LITE)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
WUBABOCOM InternationalDowngrades
DLTROTR GlobalUpgrades
ARCCCompass PointDowngrades
GTYHCitiInitiates Coverage On7.0
NKEGuggenheimMaintains100.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Harvest Health & Recreation Aims To Become 'Largest Cannabis Company In The World'

Mid-Day Market Update: Crude Oil Up Over 2%; Quanex Building Products Shares Plunge Following Q4 Results