On Tuesday, Alcon Inc. (NYSE:ALC) received a reiterated Buy rating and a $107.00 price target from Needham, following the release of their third-quarter 2024 financial results. The company reported a revenue increase of 6% on a constant currency (CC) basis, falling short of market expectations, while earnings per share (EPS) saw a 25% rise on a CC basis, surpassing consensus.
Alcon's management adjusted the mid-point forecasts for its 2024 revenue, operating margin, and EPS guidance ranges downward. Among the company's segments, Implantables was the only one to meet analyst predictions. Despite the softer domestic market for advanced technology intraocular lenses (AT-IOL), the company's core operating margin saw improvement, primarily driven by its Vision Care division, and exceeded consensus even with the revenue shortfall and increased investments in Surgical research and development.
The company's performance in the contact lens market was highlighted, with estimates suggesting Alcon gained year-over-year market share, based on reported results from itself and competitors. This assessment comes ahead of other industry players reporting their outcomes.
The quarter's results were deemed weaker than anticipated, which is believed to be influencing the day's stock movement. Nevertheless, Needham's outlook remains positive, citing potential catalysts for Alcon, such as the introduction of new products like PanOptix Pro and Unity, continued progress in margin improvement, and an upcoming Capital Markets Day that could further stimulate investor interest.
In other recent news, Alcon Inc. has seen a series of favorable analyst actions and significant developments. The company's second-quarter sales in 2024 witnessed a 6% increase to $2.5 billion, propelled by a 9% growth in implantable sales. Core diluted earnings per share rose by 15% from the previous year, hitting $0.74, with Alcon projecting a 15% to 18% growth in core diluted earnings over 2023.
KeyBanc raised Alcon's price target to $107, maintaining an Overweight rating, and highlighted a positive outlook for the company. Redburn-Atlantic upgraded Alcon's stock to Neutral, citing strong operational execution and expectations of accelerated growth due to a new equipment launch cycle.
BTIG lifted Alcon's price target to $104, pointing towards a robust product pipeline anticipated for 2025. RBC Capital Markets upgraded Alcon's stock to Outperform, raising its price target to CHF100.00 based on key opinion leader feedback and upcoming product launches.
Lastly, Citi reaffirmed its Buy rating on Alcon shares, maintaining a price target of $116.00, while CFRA also maintained its Buy rating and CHF87.00 price target for Alcon. The company also made strategic moves, including the clearance of the Unity Phaco platform by the US FDA, the acquisition of BELKIN, and advancements in contact lens technology.
InvestingPro Insights
Despite the mixed Q3 2024 results, Alcon Inc. (NYSE:ALC) continues to demonstrate financial strength and market resilience. According to InvestingPro data, the company boasts a substantial market capitalization of $42.86 billion, reflecting its significant presence in the Healthcare Equipment & Supplies industry. Alcon's revenue for the last twelve months as of Q2 2024 stood at $9.636 billion, with a growth rate of 6.06%, aligning with the reported 6% constant currency growth in the recent quarter.
InvestingPro Tips highlight Alcon's financial stability, noting that its liquid assets exceed short-term obligations, and it operates with a moderate level of debt. This financial prudence is particularly important given the company's increased investments in Surgical research and development mentioned in the article.
Furthermore, Alcon has raised its dividend for 4 consecutive years, with a current dividend yield of 0.19%. This consistent dividend growth, coupled with a 16.05% dividend increase over the last twelve months, underscores the company's commitment to shareholder returns despite market challenges.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Alcon, providing deeper insights into the company's financial health and market position.
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