Lumentum’s shares surged 11% in a week as a Bloomberg report linked the optics maker to a potential $100 billion Marvell takeover.
Key points
- Lumentum’s 11% weekly gain is linked to optics sector strength and a Bloomberg report of Marvell’s advanced acquisition talks.
- The potential deal, valued near $100 billion, would be financed in Marvell stock, making the premium dependent on Marvell’s share price.
- Analysts forecast Lumentum’s EPS to quadruple by fiscal 2028, supporting a consensus price target about 39 % above the current price.
Lumentum (LITE:NASDAQ) stock climbed 11% over the past week, buoyed by a rebound in optics equities and a Bloomberg report that Marvell Technology (MRVL:NASDAQ) is in advanced talks to acquire the company.
Bloomberg Intelligence analyst Mandeep Singh said on the Bloomberg Intelligence podcast that the transaction could be "close to $100 billion," roughly 31 % above Lumentum’s market value of $76.2 billion at the close of the preceding Friday.
Optics rebound fuels Lumentum rally
The proposed acquisition would be paid in Marvell shares, tying any premium for Lumentum shareholders to Marvell’s stock price, which fell 13 % on the day the report surfaced. At the time, Marvell’s market capitalization was about $221 billion, with cash of $3.93 billion as of Aug. 1.
If the deal proceeds, Coherent would become the largest laser supplier not owned by a chip designer. Both Lumentum and Coherent saw their shares dip after Intel and Amazon earnings heightened AI‑spending concerns; Coherent reported a 34 % revenue rise to $2.05 billion for the quarter ended June 30 and is set to report again on Nov 4.
Marvell deal valued near $100 billion
Analysts expect Lumentum’s normalized earnings per share to quadruple from $8.67 in fiscal 2026 to $35.72 in fiscal 2028, giving a forward price‑to‑earnings ratio of about 42 × at Thursday’s close—well above its five‑year average of 30 × but below the 80 × peak seen in May. The consensus price target of $1,166 suggests roughly 39 % upside from the Friday close.
Lumentum is slated to report earnings after the market close on Nov 5, with guidance for adjusted EPS of $4.05 to $4.35. Management noted a shortfall of more than 30 % in its EML laser chip supply relative to May demand, a metric investors will monitor closely.
Analysts project EPS quadruple by 2028
Some analysts argue that even without a deal, Lumentum’s earnings outlook could justify a purchase, though a reduction in the chip‑supply shortfall could ease scarcity concerns and pressure the stock, which is trading near a 39 × forward P/E.
Reader questions
What is the reported value of the possible Marvell-Lumentum acquisition?
Bloomberg Intelligence estimates the deal could be close to $100 billion, about 31 % above Lumentum’s $76.2 billion market value at the time of reporting.
How would the acquisition be financed?
The transaction is reported to be paid in Marvell shares, meaning any premium for Lumentum shareholders would be tied to Marvell’s stock price.
When is Lumentum’s next earnings report?
Lumentum is scheduled to release its earnings after the market close on November 5, with guidance for adjusted EPS of $4.05 to $4.35.
Source: finance.yahoo.com
