B. Riley downgraded Lumentum Holdings (LITE) from Buy to Neutral. It cut its price target from $1,142 to $770 after Marvell Technology announced it would acquire Lumentum in an all-stock transaction.
B. Riley's primary concern is that the deal's fixed exchange ratio limits further significant gains in Lumentum's stock. Under the agreement, Lumentum shareholders will receive 4.5 Marvell shares for each Lumentum share.
The new price target is based on Marvell's current stock price, leaving Lumentum's value tied to Marvell's performance until the deal is expected to close in the first half of 2028.