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Reasons to Retain The Cooper Companies (COO) in Your Portfolio Now
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The Cooper Companies, Inc. (COO - Free Report) is well-poised for growth, backed by strong prospects in its CooperVision (CVI) and CooperSurgical (CSI) business segments. Acquisitions boost the company’s portfolio and buoy optimism. However, unfavorable currency movements and rising costs continue to hurt revenues and margins, respectively.
Shares of this currently Zacks Rank #3 (Hold) company have risen 11.3% in the past year compared with the industry's 10.8% growth. The S&P 500 Index has gained 22.1% in the same time frame.
The Cooper Companies, with a market capitalization of $18.71 billion, is a specialty medical device company operating on a global basis.
The company’s bottom line is estimated to improve 10.9% over the next five years. Its earnings beat estimates in two of the trailing four quarters and met the mark in two, delivering an average surprise of 2.84%.
Image Source: Zacks Investment Research
What's Driving the Company’s Performance?
COO has been leading the specialty lenses market, owing to highly exclusive products of Biofinity and Clariti, and growing products of MyDay and MiSight. Its flagship silicone hydrogel lenses are expected to drive strong sales in the upcoming quarters.
In the fourth quarter of fiscal 2023, the company witnessed substantial growth across CVI’s Toric, Multifocal and single-use sphere subunits. It also experienced an organic improvement in sales on a geographical basis, with EMEA, the Americas and the Asia-Pacific markets exhibiting strength in the quarter.
The CVI segment displayed solid performance in the same period, with its revenues rising 11% at a constant exchange rate and on an organic basis to $622.9 million. Per management, strong demand for silicone hydrogel lenses contributed to the segmental uptick.
CVI revenues are likely to be in the $2.548-$2.594 billion range (organic growth of 7-9%) in fiscal 2024.
The Cooper Companies is well-positioned to benefit from the expanding CSI product portfolio as well. In the fiscal fourth quarter, CSI witnessed revenue growth in two focus areas — fertility and office and surgical products.
Revenues from fertility increased 12% year over year to $121.3 million, indicating sustained solid performance. Sales of office and surgical products improved 3% to $182.9 million.
For fiscal 2024, CSI revenues are expected to be in the $1.261-$1.283 billion range, implying organic growth of 4-6%.
What's Weighing on the Stock?
The Cooper Companies generates a significant portion of its revenues in foreign currencies. Fluctuations in foreign exchange rates may significantly mar its overseas revenues.
Moreover, an increase in the cost of sales and selling, general and administrative expenses is concerning. The contraction in operating margin during fiscal 2023 is disappointing.
Estimates Trend
The Zacks Consensus Estimate for the company's fiscal 2024 revenues is pegged at $3.85 billion, implying growth of 7.2% from the 2023 reported figure. The same for adjusted EPS is pinned at $13.82 for fiscal 2024, indicating an improvement of 7.9% from the previous year’s recorded level.
In the past 30 days, COO’s earnings estimates for fiscal 2024 remained stable.
Some better-ranked stocks to consider in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Cardinal Health (CAH - Free Report) .
Universal Health Services, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 4.4% for 2024. UHS’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UHS’ shares have risen 11.9% in the past year compared with the industry’s 17.3% growth.
Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 44.3% in the past year compared with the industry’s 4.6% growth.
Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.3%. CAH’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.64%.
Cardinal Health’s shares have risen 32.2% in the past year compared with the industry’s growth of 9.4%.
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Reasons to Retain The Cooper Companies (COO) in Your Portfolio Now
The Cooper Companies, Inc. (COO - Free Report) is well-poised for growth, backed by strong prospects in its CooperVision (CVI) and CooperSurgical (CSI) business segments. Acquisitions boost the company’s portfolio and buoy optimism. However, unfavorable currency movements and rising costs continue to hurt revenues and margins, respectively.
Shares of this currently Zacks Rank #3 (Hold) company have risen 11.3% in the past year compared with the industry's 10.8% growth. The S&P 500 Index has gained 22.1% in the same time frame.
The Cooper Companies, with a market capitalization of $18.71 billion, is a specialty medical device company operating on a global basis.
The company’s bottom line is estimated to improve 10.9% over the next five years. Its earnings beat estimates in two of the trailing four quarters and met the mark in two, delivering an average surprise of 2.84%.
Image Source: Zacks Investment Research
What's Driving the Company’s Performance?
COO has been leading the specialty lenses market, owing to highly exclusive products of Biofinity and Clariti, and growing products of MyDay and MiSight. Its flagship silicone hydrogel lenses are expected to drive strong sales in the upcoming quarters.
In the fourth quarter of fiscal 2023, the company witnessed substantial growth across CVI’s Toric, Multifocal and single-use sphere subunits. It also experienced an organic improvement in sales on a geographical basis, with EMEA, the Americas and the Asia-Pacific markets exhibiting strength in the quarter.
The CVI segment displayed solid performance in the same period, with its revenues rising 11% at a constant exchange rate and on an organic basis to $622.9 million. Per management, strong demand for silicone hydrogel lenses contributed to the segmental uptick.
CVI revenues are likely to be in the $2.548-$2.594 billion range (organic growth of 7-9%) in fiscal 2024.
The Cooper Companies is well-positioned to benefit from the expanding CSI product portfolio as well. In the fiscal fourth quarter, CSI witnessed revenue growth in two focus areas — fertility and office and surgical products.
Revenues from fertility increased 12% year over year to $121.3 million, indicating sustained solid performance. Sales of office and surgical products improved 3% to $182.9 million.
For fiscal 2024, CSI revenues are expected to be in the $1.261-$1.283 billion range, implying organic growth of 4-6%.
What's Weighing on the Stock?
The Cooper Companies generates a significant portion of its revenues in foreign currencies. Fluctuations in foreign exchange rates may significantly mar its overseas revenues.
Moreover, an increase in the cost of sales and selling, general and administrative expenses is concerning. The contraction in operating margin during fiscal 2023 is disappointing.
Estimates Trend
The Zacks Consensus Estimate for the company's fiscal 2024 revenues is pegged at $3.85 billion, implying growth of 7.2% from the 2023 reported figure. The same for adjusted EPS is pinned at $13.82 for fiscal 2024, indicating an improvement of 7.9% from the previous year’s recorded level.
In the past 30 days, COO’s earnings estimates for fiscal 2024 remained stable.
The Cooper Companies, Inc. Price
The Cooper Companies, Inc. price | The Cooper Companies, Inc. Quote
Stocks to Consider
Some better-ranked stocks to consider in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Cardinal Health (CAH - Free Report) .
Universal Health Services, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 4.4% for 2024. UHS’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UHS’ shares have risen 11.9% in the past year compared with the industry’s 17.3% growth.
Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 44.3% in the past year compared with the industry’s 4.6% growth.
Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.3%. CAH’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.64%.
Cardinal Health’s shares have risen 32.2% in the past year compared with the industry’s growth of 9.4%.