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Investung.com -- Alcon (NYSE:ALC) AG (SIX:ALCC) shares fell over 2% on Thursday after J.P. Morgan cut its rating on the stock, citing weaker-than-expected performance and reduced earnings visibility.
Analyst David Adlington at J.P. Morgan said another soft quarter, combined with a further cut to guidance, is likely to prompt questions about the company’s growth outlook for fiscal 2026.
Alcon management told investors that new product launches remain on track, but J.P. Morgan noted the reassurance would have carried more weight if supported by additional data.
The brokerage said Q4 is heavily loaded with growth, while overall market expansion remains slow and intraocular lens share losses outside the United States continue.
J.P. Morgan said consensus expectations of about 17% EPS growth in fiscal 2026 appear high, as fiscal 2025 earnings guidance has been helped by a one-off low tax rate and foreign exchange benefits.
The brokerage pointed to the annualization of tariffs and dilution from recent acquisitions as further headwinds for fiscal 2026.
The analysts cut its rating on Alcon shares to “neutral” from “overweight” and lowered its price target to SFr 62.8 for June 2027, down from SFr 94.7 for June 2026.
The reduced target reflects lower forecasts and a cut in the sector premium from 50% to 25% as growth expectations ease.
J.P. Morgan said evidence of stronger market growth or successful product launches could reverse the downgrade, but added that such developments are unlikely before the company reports fourth-quarter results.