Bernstein SocGen Group has increased its 12-month price target for IPG Photonics (NASDAQ:IPGP) to $162 from $100 and reaffirmed an Outperform rating on the stock. The updated target equates to only a modest increase - roughly 5% - above the stock's most recent quote of $153.91, even as shares have already climbed nearly 115% year-to-date.
Analyst rationale
Analyst Jay Huang pointed to two pillars supporting the move: an acceleration in the cyclical recovery visible in IPG Photonics' results, which aligns with improvements across the global fiber amplifier sector, and ongoing progress in diversifying the company's mix toward higher-barrier, higher-growth businesses.
Cost and margin outlook
Bernstein expects IPG's selling, general and administrative expense ratio to show improvement in 2026 but to remain elevated in the near term. The firm attributes the heightened ratio in part to expansion-related costs and to integration expenses tied to the company's acquisition of CleanLASER. As revenue growth builds and these cost headwinds gradually subside, Bernstein projects that operating margin should recover to double-digit levels by 2027.
Valuation and growth assumptions
The firm's forecast sits against a backdrop of premium valuation multiples. At present the company is trading at a price-to-earnings ratio of 205.8 and a PEG ratio of 1.77, metrics that reflect elevated price levels relative to current earnings. Bernstein projects an earnings-per-share compound annual growth rate of 68% for the period 2025 through 2028.
Bernstein also noted that IPG Photonics' share price has historically shown a strong correlation with demand in the global fiber amplifier market, and that the sector appears to be in an early upcycle.
Recent rating history and market moves
The firm originally upgraded IPG Photonics to Outperform in August and says it remains constructive on the stock despite the company's roughly 100% rally year-to-date.
Quarterly results and analyst reactions
IPG Photonics reported robust fourth-quarter 2025 results, producing an adjusted earnings per share of $0.46, well above the $0.18 consensus estimate — a 155.56% surprise. Revenue for the quarter came in at $274.5 million versus an anticipated $247.68 million.
Even after the quarter's upside, Raymond James revised its coverage to downgrade IPG Photonics from Strong Buy to Outperform while simultaneously raising its price target to $180.00 from $97.00. The firm issued the downgrade despite the company's book-to-bill ratio remaining above 1.0, a signal cited as consistent with a recovery in core industrial demand.
These developments underscore a dynamic period for IPG Photonics in which improving end-market demand, acquisition-related costs and rich valuation metrics are all influencing analyst views and investor expectations.