11:04 AM EDT, 08/13/2026 (MT Newswires) -- Coherent's (COHR) next catalyst for its stock is more clarity on the orders and timing for its Near-Packaged Optics products, Morgan Stanley said in a Thursday note.

The company's fiscal Q4 results were mostly in line with expectations, although it is ramping up capacity quicker than anticipated, with data center growth up 24% sequentially, Morgan Stanley analysts said. The gross margin increase was on par with the previous quarter, but incremental operating margins showed upside with revenue materially higher, the analysts said.

Coherent's EPS for the quarter rose, driven by increased supply and healthy incrementals, according to the note.

The rebound in stock price prior to the quarter reflects reports that the US Federal Communications Commission is planning to ban imports of new models of Chinese optical transceivers, as well as its recent results, the analysts said.

Morgan Stanley revised its fiscal Q1 non-GAAP EPS and revenue estimates to $1.96 and $2.3 billion from $1.77 and $2.12 billion previously. The brokerage also adjusted its fiscal 2027 non-GAAP EPS and revenue estimates to $9.24 and $10.55 billion from $8.14 and $9.46 billion previously.

Morgan Stanley maintained the company's stock rating at equalweight and raised the price target to $375 from $330.

Price: 346.08, Change: -9.56, Percent Change: -2.69