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On Friday, Citi analysts upheld a Buy rating and a CHF99.00 price target for Alcon Inc. (NYSE:ALC:SW) (NYSE: ALC), following the company’s long-term guidance update. The $48 billion market cap company, currently trading near its 52-week high, has shown strong momentum with a 16.5% return over the past year. According to InvestingPro data, Alcon’s new projections suggest a double-digit upgrade to consensus earnings per share (EPS) estimates for 2029 at the mid-point. The company is aiming for a 6-8% net sales currency growth, which is aligned with the VisibleAlpha consensus of approximately 7% and slightly below Citi’s estimate of around 8% for the average from 2025 to 2029. Additionally, Alcon targets a 12-15% core diluted EPS currency growth, surpassing the consensus of 10.8% and matching Citi’s projection of 15.5% compound annual growth rate (CAGR) from 2024 to 2029.
Alcon’s management has reaffirmed its commitment to achieving a mid-20s core EBIT margin, despite anticipating higher core research and development (R&D) expenses relative to sales, which are now expected to be between 8-10% compared to the previously forecasted range of 7-9%. The updated guidance comes as a response to investor concerns regarding the company’s growth prospects and earnings progression.
The analysts at Citi have interpreted these new long-term goals as a positive development. They believe that the updated guidance provided by Alcon at its 2025 Capital Markets Day demonstrates a robust outlook for the company’s future performance. While the company trades at a relatively high P/E ratio of 47.25, InvestingPro analysis reveals 12 additional key insights about Alcon’s valuation and growth prospects, available in the comprehensive Pro Research Report, part of the deep-dive analysis covering over 1,400 US stocks. This reassurance is particularly significant given the backdrop of apprehensions about the company’s growth trajectory and earnings potential.
Alcon, which specializes in eye care products and generates annual revenue of $9.9 billion, has thus received a strong vote of confidence from Citi, with the reaffirmed Buy rating indicating the firm’s optimism about the company’s stock. The guidance update is expected to be a key factor for investors as they assess Alcon’s market position and financial health in the coming years.
In other recent news, Alcon has announced the acquisition of a majority stake in Aurion Biotech, aiming to advance Aurion’s cell therapy asset, AURN001, into Phase 3 trials in the U.S. by the latter half of 2025. This acquisition is expected to leverage Alcon’s R&D capabilities while Aurion continues as an independent entity. Additionally, Alcon has agreed to acquire LENSAR Inc. for approximately $360 million, with the potential to increase to $430 million based on certain performance milestones. This move is expected to enhance Alcon’s offerings in laser-assisted cataract surgery, aligning with its strategic goals in the ophthalmology sector.
Analyst firms have also weighed in on Alcon’s recent activities. Bernstein has maintained an Outperform rating with a $110.50 price target, citing synergies between Alcon’s intraocular lenses and LENSAR’s technology. Stifel has reiterated a Buy rating with a $100 target, pointing to Alcon’s strong product pipeline, including the upcoming launches of UNITY and PanOptix Pro. Meanwhile, BofA Securities upgraded Alcon from Neutral to Buy, raising the price target to CHF96, driven by expectations of an earnings upgrade cycle and product launch momentum.
These developments reflect Alcon’s strategic positioning in the eye care market and its focus on expanding its product portfolio and technological capabilities.
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