Cooper Companies Seeks Recovery Amid Market Challenges
The Cooper Companies (COO), based in San Ramon, California, specializes in developing, manufacturing, and marketing products for contact lens wearers. With a market capitalization of $18.6 billion, COO’s offerings span from contact lenses for vision care to diagnostic products, surgical instruments, and accessories tailored for gynecologists and obstetricians.
Large-Cap Status and Market Position
As a large-cap stock, COO stands out with its significant market presence, which allows the company to wield substantial influence in the medical instruments and supplies sector. The firm holds a commanding position in the U.S. contact lens market, thanks to its diverse array of brands, including Proclear, Biofinity, MyDay, and Clariti. Through strategic acquisitions, notably the recent addition of a fertility company, COO continues to broaden its product range and demonstrate its financial robustness. The company’s investment in R&D, particularly in myopia management and innovative contact lens technology, showcases its commitment to remaining competitive.
Stock Performance Analysis
However, recent performance indicates challenges ahead. COO shares have declined 17.7% from their 52-week high of $112.38 reached on September 16. Over the last three months, COO stocks have dropped 15.8%, underperforming compared to the Dow Jones Industrials Average’s gain of 1.9% in the same period.
In the long term, COO shares rose slightly, with a 1.1% increase over the past six months. In contrast, shares are down marginally over the past year, trailing behind the Dow’s 9.6% growth over six months and an impressive 14.8% annual return.
The stock has consistently traded below its 50-day moving average since late October and has remained below its 200-day moving average since mid-December, signaling a bearish trend.
Challenges Ahead
The decline in COO’s stock can be attributed to falling sales of PARAGUARD and intensifying competition in the birth control market. Additionally, there is waning demand for torics and multifocals as Q4 wraps up, which may persist into the upcoming quarter. Anticipated sales growth from the back-to-school season is projected to decelerate in the first half of fiscal 2025. Moreover, inventory reductions in the U.S. during October have significantly impacted myopia management sales in Q4, a trend likely to continue.
Q4 Results and Analyst Outlook
On December 5, COO shares fell more than 1% after the company reported its Q4 results. The adjusted earnings per share (EPS) of $1.04 exceeded analyst estimates by 4%, while revenues reached $1 billion but fell short of expectations.
Align Technology, Inc. (ALGN), COO’s competitor, has not fared well either, with its shares dropping 14.3% year-to-date and 23.7% over the past year.
Despite these hurdles, Wall Street analysts remain hopeful about COO’s future. The stock has received a consensus “Strong Buy” rating from the 15 analysts following it, and the average price target of $116.69 indicates a potential upside of 26.1% from current levels.
On the date of publication, Neha Panjwani did not hold any positions (directly or indirectly) in the mentioned securities. All information and data provided are for informational purposes only. For further details, please view the Barchart Disclosure Policy here.
The views expressed are those of the author and do not necessarily reflect the opinions of Nasdaq, Inc.
