Needham maintains Buy rating on Alcon stock amid market slowdown

Investing.com - Needham has reiterated its Buy rating and $107.00 price target on Alcon Inc. (NYSE:ALC), a $44.6 billion healthcare equipment company, following its second-quarter 2025 results that showed mixed performance. According to InvestingPro analysis, the stock is currently trading near its 52-week low, with a P/E ratio of 39.8x.

Alcon reported second-quarter revenue growth of 3% at constant currency, which fell short of consensus expectations due to softer market conditions. Despite the revenue miss, earnings per share increased 1% at constant currency, exceeding analyst forecasts thanks to lower tax expenses. The company maintains strong financial health, with InvestingPro data showing a healthy current ratio of 2.7 and an overall financial health score rated as "GREAT."

Management has reduced its 2025 revenue guidance, now projecting low-single-digit percentage growth compared to its previous forecast of 4%. The revision primarily reflects lower market growth assumptions, particularly in the Surgical segment, though the company maintained its earnings per share guidance due to more favorable tax assumptions.

Alcon experienced core operating margin contraction during the quarter, driven by investments in its Surgical business, which was partially offset by margin expansion in the Vision Care segment.

Based on actual results from Alcon and competitors, Needham estimates that Alcon’s contact lens market share increased year-over-year, supporting the firm’s continued Buy recommendation on the stock.

In other recent news, Alcon reported second-quarter 2025 sales of $2.6 billion, marking a 4% increase compared to the same period last year. The company noted a decrease in diluted earnings per share to $0.35 from $0.45 in the second quarter of 2024, while core diluted earnings per share saw a slight rise to $0.76 from $0.74. Alcon has also announced its intention to acquire LumiThera and its photobiomodulation device for treating early and intermediate dry age-related macular degeneration. This device has received both FDA de novo market authorization and a CE Mark. In another development, Alcon received Health Canada approval for its UNITY Vitreoretinal Cataract System, enhancing its surgical capabilities. Stifel reiterated its Buy rating on Alcon, maintaining a price target of $100, citing the company’s leadership in the ophthalmology sector. These recent developments highlight Alcon’s ongoing strategic initiatives and market position.

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