Barclays Upgrades Lumentum to Overweight, Stock Rises 4.5% Despite 30% Decline from May Peak

According to Barclays' research report released Monday (July 20), the investment bank raised Lumentum (LITE-US) to overweight from neutral, maintaining a $1,000 price target. The optical communications supplier's stock surged 4.5% to $765.55 on the day, becoming the second-best performer in the S&P 500.

Despite the rally, Lumentum remains 30% below its May 11 closing high of $1,053.09. Barclays analyst Tom O'Malley noted the company's fundamentals have not substantially changed, with gross margins expanding 13 percentage points year-over-year to approximately 48%, supported by continued supply constraints in laser components used in optical modules.