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Is it a Prudent Move to Retain ALC Stock in Your Portfolio Now?
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Key Takeaways
Alcon's Surgical unit grew 2% in Q2, aided by consumables strength and new product launches.
ALC's Vision Care is fueled by contact lens advances, FDA approval of TRYPTYR, and strong eye drop sales.
Macroeconomic headwinds, tariffs, and rising costs weighed on Alcon's Q2 results and outlook.
Alcon’s (ALC - Free Report) Vision Care business continues to gain from its diverse portfolio of contact lenses and ocular health products. Additionally, growth momentum within the Surgical business is poised to boost top-line grow in the upcoming quarters. Meanwhile, adverse macroeconomic conditions and intense competition may harm the company’s operations.
Year to date, this Zacks Rank #3 (Hold) stock has dipped 8.4% compared with the industry’s 11.4% decline. The S&P 500 composite has risen 13.3% in the same time frame.
The renowned pharmaceutical and medical device manufacturer has a market capitalization of $43.49 billion. ALC’s earnings surpassed estimates in three of the trailing four quarters and matched in one, delivering an average surprise of 4.6%.
Let’s delve deeper.
Upsides for ALC
Surgical Business Momentum: Alcon’s Surgical business continues to gain from the company’s diverse portfolio and incremental innovation. The company’s flagship lenses, Vivity and PanOptix, continue to lead the category in the United States and around the world.
Additionally, it continues to expand in areas where it has significant growth opportunities, such as China. In March 2025, Clareon Vivity IOL received CE Mark. Second-quarter Surgical revenues were up 2% year over year, supported by 6% growth in Consumables, led by vitreoretinal and cataract consumables, particularly in international markets, as well as price increases. The recent launch of Unity VCS is expected to drive meaningful acceleration in Equipment sales through the second half of the year.
Vision Care Returns to Growth: Alcon is registering solid growth, banking on strong sales of its contact lenses and ocular health products. In the second quarter, the company advanced its PRECISION7 sphere and toric lenses in the United States. Other recent major innovations, such as the TOTAL30 family and DAILIES TOTAL1 for astigmatism, continue to drive share gains.
Meanwhile, ocular health continues to report strong performance with its portfolio of eye drops, including strength in the SYSTANE family of artificial tears. In the second quarter, Alcon secured the FDA’s approval for TRYPTYR 0.003% for the treatment of signs and symptoms of Dry Eye Disease (DED).
TRYPTYR targets a major unmet need in the U.S. dry eye market, where fewer than 10% of more than 35 million people are treated with a prescription product. Management believes the drug can potentially expand the category, with peak sales estimated at approximately $250-$400 million, and full reimbursement in about 18 months.
Downsides for ALC
Macroeconomic Pressure Stays: Alcon’s operations are exposed to shifting economic and financial environments in many countries. Ongoing conflicts in emerging markets could disrupt the global supply chain and increase the costs of international transactions.
Moreover, the current trade environment is extremely volatile, with the imposition of trade tariffs, sanctions or other restrictions in effect. In the second quarter of 2025, the company incurred $27 million in tariff-related charges, and based on tariff rates as of Aug. 11, it expects a full-year impact of approximately $100 million on its cost of sales. In the same quarter, the cost of net sales increased 7.9% year over year. Selling, general, and administrative (SG&A) expenses were up 3.9%.
Image Source: Zacks Investment Research
Tough Competitive Landscape: The ophthalmology industry is highly competitive, and Alcon faces intense competition in both surgical and vision care businesses. The competitors range from large manufacturers with multiple business lines to small manufacturers that offer a limited range of specialized products. Moreover, at times, pharmaceutical companies offer alternative medical therapies that can potentially disrupt core elements of their business. If Alcon is unable to keep pace with innovation, its market position could be affected.
ALC Stock Estimate Trend
The Zacks Consensus Estimate for 2025 earnings per share has moved south 0.3% to $3.09 in the past 30 days.
The Zacks Consensus Estimate for 2025 revenues is pegged at $10.35 billion, suggesting a 5.3% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are GE HealthCare Technologies (GEHC - Free Report) , Masimo (MASI - Free Report) and Phibro Animal Health (PAHC - Free Report) .
GE HealthCare has an earnings yield of 5.8% compared with the industry’s 0.2%. Shares of the company have surged 76.5% compared with the industry’s 3.4% growth. GEHC’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 12.5%.
Masimo, currently carrying a Zacks Rank #2, has an estimated long-term earnings growth rate of 12.5% compared with the industry’s 9.9%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 9.17%. MASI’s shares have rallied 18.9% against the industry’s 15.4% decline in the past year.
Phibro, currently carrying a Zacks Rank #2, has an estimated earnings growth rate of 17.2% for fiscal 2026 compared with the S&P 500 composite’s 10.9%. Shares of the company have rallied 101.1% compared with the industry’s 3% growth. PAHC’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%.
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Is it a Prudent Move to Retain ALC Stock in Your Portfolio Now?
Key Takeaways
Alcon’s (ALC - Free Report) Vision Care business continues to gain from its diverse portfolio of contact lenses and ocular health products. Additionally, growth momentum within the Surgical business is poised to boost top-line grow in the upcoming quarters. Meanwhile, adverse macroeconomic conditions and intense competition may harm the company’s operations.
Year to date, this Zacks Rank #3 (Hold) stock has dipped 8.4% compared with the industry’s 11.4% decline. The S&P 500 composite has risen 13.3% in the same time frame.
The renowned pharmaceutical and medical device manufacturer has a market capitalization of $43.49 billion. ALC’s earnings surpassed estimates in three of the trailing four quarters and matched in one, delivering an average surprise of 4.6%.
Let’s delve deeper.
Upsides for ALC
Surgical Business Momentum: Alcon’s Surgical business continues to gain from the company’s diverse portfolio and incremental innovation. The company’s flagship lenses, Vivity and PanOptix, continue to lead the category in the United States and around the world.
Additionally, it continues to expand in areas where it has significant growth opportunities, such as China. In March 2025, Clareon Vivity IOL received CE Mark. Second-quarter Surgical revenues were up 2% year over year, supported by 6% growth in Consumables, led by vitreoretinal and cataract consumables, particularly in international markets, as well as price increases. The recent launch of Unity VCS is expected to drive meaningful acceleration in Equipment sales through the second half of the year.
Vision Care Returns to Growth: Alcon is registering solid growth, banking on strong sales of its contact lenses and ocular health products. In the second quarter, the company advanced its PRECISION7 sphere and toric lenses in the United States. Other recent major innovations, such as the TOTAL30 family and DAILIES TOTAL1 for astigmatism, continue to drive share gains.
Meanwhile, ocular health continues to report strong performance with its portfolio of eye drops, including strength in the SYSTANE family of artificial tears. In the second quarter, Alcon secured the FDA’s approval for TRYPTYR 0.003% for the treatment of signs and symptoms of Dry Eye Disease (DED).
TRYPTYR targets a major unmet need in the U.S. dry eye market, where fewer than 10% of more than 35 million people are treated with a prescription product. Management believes the drug can potentially expand the category, with peak sales estimated at approximately $250-$400 million, and full reimbursement in about 18 months.
Downsides for ALC
Macroeconomic Pressure Stays: Alcon’s operations are exposed to shifting economic and financial environments in many countries. Ongoing conflicts in emerging markets could disrupt the global supply chain and increase the costs of international transactions.
Moreover, the current trade environment is extremely volatile, with the imposition of trade tariffs, sanctions or other restrictions in effect. In the second quarter of 2025, the company incurred $27 million in tariff-related charges, and based on tariff rates as of Aug. 11, it expects a full-year impact of approximately $100 million on its cost of sales. In the same quarter, the cost of net sales increased 7.9% year over year. Selling, general, and administrative (SG&A) expenses were up 3.9%.
Image Source: Zacks Investment Research
Tough Competitive Landscape: The ophthalmology industry is highly competitive, and Alcon faces intense competition in both surgical and vision care businesses. The competitors range from large manufacturers with multiple business lines to small manufacturers that offer a limited range of specialized products. Moreover, at times, pharmaceutical companies offer alternative medical therapies that can potentially disrupt core elements of their business. If Alcon is unable to keep pace with innovation, its market position could be affected.
ALC Stock Estimate Trend
The Zacks Consensus Estimate for 2025 earnings per share has moved south 0.3% to $3.09 in the past 30 days.
The Zacks Consensus Estimate for 2025 revenues is pegged at $10.35 billion, suggesting a 5.3% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are GE HealthCare Technologies (GEHC - Free Report) , Masimo (MASI - Free Report) and Phibro Animal Health (PAHC - Free Report) .
GE HealthCare has an earnings yield of 5.8% compared with the industry’s 0.2%. Shares of the company have surged 76.5% compared with the industry’s 3.4% growth. GEHC’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 12.5%.
GEHC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Masimo, currently carrying a Zacks Rank #2, has an estimated long-term earnings growth rate of 12.5% compared with the industry’s 9.9%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 9.17%. MASI’s shares have rallied 18.9% against the industry’s 15.4% decline in the past year.
Phibro, currently carrying a Zacks Rank #2, has an estimated earnings growth rate of 17.2% for fiscal 2026 compared with the S&P 500 composite’s 10.9%. Shares of the company have rallied 101.1% compared with the industry’s 3% growth. PAHC’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%.