Alcon shares get a boost as Mizuho raises price target

Alcon Inc. (NYSE: NYSE:ALC) has received an updated price target from Mizuho, with the firm raising its outlook from $105.00 to $110.00 while maintaining an Outperform rating on the stock. The adjustment follows Alcon's continued market performance and anticipated growth.

The company reported notable achievements in the second quarter of 2024, including a 9% currency-adjusted growth in contact lens sales, outpacing the underlying market's 6% expansion.

The growth occurred despite a one-time issue with manufacturing raw materials. Additionally, Alcon saw a year-over-year increase of 190 basis points in global Advanced Technology Intraocular Lens (AT-IOL) penetration, propelled by strong performances in both U.S. and overseas markets.

Despite a slowdown in global cataract procedures, which only grew by 2% year-over-year due to a weaker U.S. market, the international market remained stable. The company also expects AT-IOL penetration to continue improving at the historical rate of approximately 50 basis points.

Alcon's underlying margin profile for the second quarter stood at 21.5%, which is at the upper end of the full-year guidance of 20.5-21.5%. This figure takes into account the impact of foreign exchange rates and research and development spending, which are considered headwinds for the company.

Alcon reported second-quarter earnings that exceeded expectations, with adjusted earnings per share of $0.74, outperforming the consensus forecast. However, Alcon's revenue of $2.48 billion fell short of the projected $2.53 billion. Despite these results, Alcon maintained its full-year 2024 guidance, projecting adjusted earnings per share of $3.00 to $3.10 and revenue of $9.9 billion to $10.1 billion.

In view of the results, Wells Fargo, BTIG, Stifel, and Citi have all recently updated their outlooks on Alcon. Wells Fargo raised its price target for Alcon to $105, BTIG increased its price target to $98, and Stifel and Citi reaffirmed their price targets of $100 and CHF103 respectively.

InvestingPro Insights

Alcon Inc. (NYSE: ALC) has demonstrated commendable financial discipline and market performance, as reflected in its recent metrics. According to InvestingPro data, Alcon has a market capitalization of $46.88 billion and a forward P/E ratio of 42.65, indicating investor confidence in its earnings potential. The company's revenue growth over the last twelve months as of Q2 2024 stands at 6.06%, showcasing its ability to expand in a competitive environment. Additionally, Alcon's gross profit margin during the same period is a robust 55.37%, underscoring efficient operations and strong pricing power.

InvestingPro Tips highlight that Alcon has raised its dividend for four consecutive years, signaling a commitment to returning value to shareholders. Moreover, the company is trading at a low P/E ratio relative to near-term earnings growth, suggesting it may be undervalued based on its future earnings potential. For investors seeking further insights, there are 12 additional InvestingPro Tips available, offering a deeper dive into Alcon's financial health and market position.

As Alcon gears up for a transformative new product launch cycle in 2025, these financial metrics and expert analyses from InvestingPro provide a comprehensive view of the company's current standing and future prospects.

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