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Alcon (ALC) Stock Up 9.7% YTD: Will the Rally Continue?
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Alcon Inc. (ALC - Free Report) shares have increased 9.7% year to date compared with the industry’s increase of 11%. The Medical sector has declined 8.2% in the said time frame. The company has a market capitalization of $36.98 billion.
The Surgical segment’s consistent market share gains, courtesy of strong consumables and equipment sales, are driving this Zacks Rank #2 (Buy) company. Its earnings increased 14.9% in the last five years. ALC’s ROE for the trailing 12 months was 5.79%, better than the industry average of (26.55%).
Will the Upside Continue?
The Zacks Consensus Estimate for ALC’s 2023 earnings is pegged at $2.75, indicating a 22.8% increase from the year-ago reported figure. The consensus estimate for 2023 revenues is pegged at $9.48, indicating a year-over-year improvement of 9.5%.
Alcon’s Surgical business continues to gain from the company’s diverse portfolio and incremental innovation. In Implantables, excluding the impact of the Korea PCIOL reimbursement change, the company is seeing strong growth banking on the Vivity rollout in select international markets, including Japan and Canada.
In terms of the latest development, Alcon remained encouraged by the resilience of global ATIOL penetration, which was up 80 basis points year over year and up 60 basis points sequentially. This growth was primarily driven by strength in international markets. In terms of the end market, in Surgical, global cataract procedures were up mid-single digits in the second quarter.
Within Vision Care, Alcon is registering solid growth, banking on strong sales of its contact lenses and ocular health products. In contact lenses, the company is successfully executing its strategy of investing in fast-growing market segments with significant share opportunities. As a result, Alcon is outpacing market growth in every category where it has launched new products.
ALC is witnessing meaningful share gains driven by its new toric product launches, including Precision1, Total30 and Dailies Total1. It introduced Total30 for astigmatism in the first quarter. This is the first reusable lens water gradient technology explicitly created for astigmatic wearers and initial customer response has been exceptional. A total of 30 toric is currently available in the U.S. and parts of Europe, and Alcon anticipates expanding availability to additional markets throughout 2023.
Furthermore, the raised 2023 guidance is an indicator of continued future growth. The company anticipates 2023 net sales in the range of $9.3-$9.5 billion (previously $9.2-$9.4 billion). The revised range suggests growth of 9%-11% at CER from 2022, up from the earlier projected growth of 7%-9%. The Zacks Consensus Estimate for ALC’s revenues is pegged at $9.35 billion.
Core EPS for the full year is expected in the range of $2.70-$2.80 (previously $2.55-$2.65). This indicates 28-32% growth at CER over 2022, up from the earlier projected growth of 20%-24%. The Zacks Consensus Estimate for Alcon’s 2023 earnings is currently pegged at $2.64 per share.
Estimate Trends
The Zacks Consensus Estimate for ALC’s 2023 and 2024 has moved 4.2% and 2.3% north, respectively, in the past 90 days, reflecting analysts’ optimism.
Key Picks
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Cardinal Health (CAH - Free Report) and Align Technology (ALGN - Free Report) , each carrying a Zacks Rank #2.
DaVita has gained 25.5% against the industry’s 8.9% decline in the past year.
Cardinal Health stock has risen 21.3% in the past year. Earnings estimates for the company have increased from $6.65 to $6.66 for 2023 and have remained constant at $7.56 for 2024 in the past 30 days.
CAH’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.03%. In the last reported quarter, it posted an earnings surprise of 4.73%.
Estimates for Align Technology’s 2023 earnings have moved up from $8.77 to $8.78 per share in the past 30 days. Shares of the company have increased 27% in the past year compared with the industry’s rise of 14.3%.
ALGN’s earnings beat estimates in three of the trailing four quarters and missed in one. In the last reported quarter, it posted an earnings surprise of 9.90%.
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Alcon (ALC) Stock Up 9.7% YTD: Will the Rally Continue?
Alcon Inc. (ALC - Free Report) shares have increased 9.7% year to date compared with the industry’s increase of 11%. The Medical sector has declined 8.2% in the said time frame. The company has a market capitalization of $36.98 billion.
The Surgical segment’s consistent market share gains, courtesy of strong consumables and equipment sales, are driving this Zacks Rank #2 (Buy) company. Its earnings increased 14.9% in the last five years. ALC’s ROE for the trailing 12 months was 5.79%, better than the industry average of (26.55%).
Will the Upside Continue?
The Zacks Consensus Estimate for ALC’s 2023 earnings is pegged at $2.75, indicating a 22.8% increase from the year-ago reported figure. The consensus estimate for 2023 revenues is pegged at $9.48, indicating a year-over-year improvement of 9.5%.
Alcon’s Surgical business continues to gain from the company’s diverse portfolio and incremental innovation. In Implantables, excluding the impact of the Korea PCIOL reimbursement change, the company is seeing strong growth banking on the Vivity rollout in select international markets, including Japan and Canada.
In terms of the latest development, Alcon remained encouraged by the resilience of global ATIOL penetration, which was up 80 basis points year over year and up 60 basis points sequentially. This growth was primarily driven by strength in international markets. In terms of the end market, in Surgical, global cataract procedures were up mid-single digits in the second quarter.
Within Vision Care, Alcon is registering solid growth, banking on strong sales of its contact lenses and ocular health products. In contact lenses, the company is successfully executing its strategy of investing in fast-growing market segments with significant share opportunities. As a result, Alcon is outpacing market growth in every category where it has launched new products.
ALC is witnessing meaningful share gains driven by its new toric product launches, including Precision1, Total30 and Dailies Total1. It introduced Total30 for astigmatism in the first quarter. This is the first reusable lens water gradient technology explicitly created for astigmatic wearers and initial customer response has been exceptional. A total of 30 toric is currently available in the U.S. and parts of Europe, and Alcon anticipates expanding availability to additional markets throughout 2023.
Furthermore, the raised 2023 guidance is an indicator of continued future growth. The company anticipates 2023 net sales in the range of $9.3-$9.5 billion (previously $9.2-$9.4 billion). The revised range suggests growth of 9%-11% at CER from 2022, up from the earlier projected growth of 7%-9%. The Zacks Consensus Estimate for ALC’s revenues is pegged at $9.35 billion.
Core EPS for the full year is expected in the range of $2.70-$2.80 (previously $2.55-$2.65). This indicates 28-32% growth at CER over 2022, up from the earlier projected growth of 20%-24%. The Zacks Consensus Estimate for Alcon’s 2023 earnings is currently pegged at $2.64 per share.
Estimate Trends
The Zacks Consensus Estimate for ALC’s 2023 and 2024 has moved 4.2% and 2.3% north, respectively, in the past 90 days, reflecting analysts’ optimism.
Key Picks
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Cardinal Health (CAH - Free Report) and Align Technology (ALGN - Free Report) , each carrying a Zacks Rank #2.
DaVita has an estimated long-term growth rate of 12.7%. DVA’s earnings surpassed estimates in three of the trailing four quarters and missed once, with an average surprise of 21.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita has gained 25.5% against the industry’s 8.9% decline in the past year.
Cardinal Health stock has risen 21.3% in the past year. Earnings estimates for the company have increased from $6.65 to $6.66 for 2023 and have remained constant at $7.56 for 2024 in the past 30 days.
CAH’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.03%. In the last reported quarter, it posted an earnings surprise of 4.73%.
Estimates for Align Technology’s 2023 earnings have moved up from $8.77 to $8.78 per share in the past 30 days. Shares of the company have increased 27% in the past year compared with the industry’s rise of 14.3%.
ALGN’s earnings beat estimates in three of the trailing four quarters and missed in one. In the last reported quarter, it posted an earnings surprise of 9.90%.