Lumentum initiated with a Neutral at UBS

UBS analyst David Vogt initiated coverage of Lumentum with a Neutral rating and $50 price target. The analyst states that he expects the company’s growth over the medium-term to be solid but below its target of over 10%. Vogt also warns that Lumentum’s sensing optionality is overshadowed by the near-term margin pressure and supply headwinds, though given the company’s exposure to 5G and hyperscaler investment in data centers, he sees share gains in the out years.