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Valued at a market cap of $16.8 billion, The Cooper Companies, Inc. (COO) is a specialty medical device company that develops, manufactures, and markets contact lens wearers. The San Ramon, California-based company's products are primarily designed for solving vision challenges like astigmatism, presbyopia and ocular dryness.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and COO fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the medical instruments & supplies industry. With a strong global presence in over 100 countries, the company benefits from steady demand and a recession-resistant business model. It drives growth through continuous innovation and strategic acquisitions, expanding its product portfolio and market reach.
Despite its notable strength, this vision care company has slipped 25.2% from its 52-week high of $112.38, reached on Sep. 16, 2024. Moreover, it has declined 9.4% over the past three months, considerably lagging behind the broader Health Care Select Sector SPDR Fund’s (XLV) 5.6% gain over the same time frame.
In the longer term, COO has declined 16.3% over the past 52 weeks, underperforming XLV’s 1.2% rise over the same time frame. Moreover, on a YTD basis, shares of COO are down nearly 8.6%, compared to XLV’s 7% uptick.
To confirm its bearish trend, COO has been trading below its 200-day moving average since mid-December, 2024, with slight fluctuations, and has remained below its 50-day moving average since late October, 2024, experiencing some fluctuations.
On Mar. 6, COO released its Q1 earnings results, leading to a 6.6% drop in its stock price the following day. The decline came as the company reported revenue of $964.7 million, which, despite growing 3.6% year-over-year, fell 1.6% short of analyst expectations. A key factor contributing to this revenue miss was a decline in CooperVision’s Asia-Pacific revenue on a reported basis. However, on a positive note, adjusted earnings rose 8.2% year-over-year to $0.92 per share, surpassing the consensus estimate of $0.91. This earnings beat was supported by an increase in both adjusted gross and operating profit margins, reflecting improved efficiency and cost management.
Looking ahead, for fiscal 2025, the company expects adjusted EPS between $3.94 and $4.02, and anticipates revenue in the range of $4.1 billion to $4.2 billion, representing organic growth of 6% to 8%.
The Cooper Companies’ underperformance looks even more pronounced when compared to its rival, Alcon Inc. (ALC), which gained 10.5% over the past 52 weeks and 8.8% on a YTD basis.
Despite COO’s recent underperformance relative to its broader sector, analysts remain moderately bullish about its prospects. The stock has a consensus rating of “Moderate Buy” from the 16 analysts covering it, and the mean price target of $110.36 suggests an ambitious 31.3% premium to its current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
