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Reiterate Cooper at Neutral

by Zacks Equity Research

March 15, 2013 | Comments : 0 Recommended this article: (0)

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On Mar 13, 2013, we retained The Cooper Companies Inc. (COO - Analyst Report) at Neutral after the company beat Zacks Consensus Estimates for earnings and revenue for fiscal first quarter 2013.

Why the Retention?

Cooper released its results for the fiscal first quarter on Mar 7. The company posted adjusted earnings per share of $1.23 per share, higher than the Zacks Consensus Estimate of earnings of $1.20 a share. Revenues in the reported quarter surged 16% (up 11% in constant currency, barring acquisitions) year over year to $379.8 million, beating the Zacks Consensus Estimate of $365 million.

Over the past 30 days, the Zacks Consensus Estimate for fiscal 2013 has moved up by 2 cents to $6.04. For fiscal 2014, the Zacks Consensus Estimate has increased by 5 cents to $6.70 during the same timeframe.

For fiscal 2013, Cooper envisages revenues in the range of $1,575 million and $1,625 million (earlier $1,565 million to $1,625 million), comprising CVI sales of $1,260 million to $1,290 million and CSI sales of $315 million to $335 million.

Cooper expects reported earnings per share in the band of $6.22 and $6.37 (earlier $5.90 and $6.10) for fiscal 2013. COO also guided to adjusted earnings per share between $5.95 and $6.10 (earlier $5.90 and $6.10). Free cash flow is expected in the range of $170 million to $200 million (earlier $210 million to $230 million).

The stock carries a short-term Zacks Rank #2 (Buy). We are positive on Cooper as it reported a good performance in the reported quarter. Moreover, this contact lens and womens’ health focused company continues to expand margins, synergize acquisitions and expand geographical reach. However, COO faces formidable competition in each of its major product lines.

Other Stocks to Consider

We are positive about Medical Action Industries Inc. (MDCI - Snapshot Report), which carries a Zacks Rank #1 (Strong Buy). We are also positive about Steris Corp. (STE - Snapshot Report) and Becton, Dickinson and Company (BDX - Analyst Report) each of which carry a Zacks Rank #2 (Buy) and are expected to do well.

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