Stifel reiterates Buy rating on Cooper Companies stock with $90 price target

Investing.com - Stifel has maintained its Buy rating on Cooper Companies (NASDAQ:COO) stock with a price target of $90.00, according to a research note released Thursday. The $14.95 billion market cap company currently trades at a P/E ratio of 36, with InvestingPro analysis suggesting the stock is slightly undervalued based on its Fair Value model.

The research firm highlighted the defensive nature of the contact lens market, noting it will benefit from what it describes as a sustainable shift toward silicone hydrogel (SiHy) daily lenses.

Stifel emphasized that Cooper Companies is strategically positioned with "one of the strongest SiHy daily portfolios in the market today," giving the company a competitive advantage in this growing segment.

The firm also pointed to Cooper’s CooperSurgical business unit as "a solid, durable MSD%+ grower," indicating consistent mid-single-digit percentage growth potential from this division.

Looking at longer-term opportunities, Stifel identified Cooper’s potential to capitalize on the "very large but vastly under-penetrated pediatric myopia management opportunity" through its MiSight lens and comprehensive myopia management portfolio.

In other recent news, Cooper Companies reported second-quarter results that exceeded expectations in both revenue and earnings per share (EPS). Despite these strong results, the company adjusted its revenue growth outlook downward, while increasing its EPS guidance by $0.10 at the midpoint. Piper Sandler maintained an Overweight rating but reduced the price target to $105, reflecting a cautious stance on future growth. Needham also noted the mixed guidance, maintaining a Hold rating due to the combination of positive EPS revisions and conservative revenue forecasts. Meanwhile, JPMorgan downgraded Cooper Companies from Overweight to Neutral, citing concerns over slower growth in the contact lens and fertility markets, and reduced the price target to $76.

Stifel analysts reiterated their Buy rating, maintaining a $90 price target, despite a recent moderation in revenue growth guidance. They believe the stock’s current valuation offers potential for recovery. Additionally, Needham upgraded the stock to Buy, highlighting a favorable entry point due to a perceived dislocation between valuation and fundamentals. Cooper Companies’ contact lens segment, CooperVision, showed a 7% organic growth, outperforming expectations, although the outlook for the second half remains cautious.

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