On Tuesday, Alcon Inc. (NYSE:ALC:SW) (NYSE: ALC), a leader in eye care products, received a confirmation of a Buy rating and a CHF87.00 price target from CFRA, a notable financial research firm. The firm's forecast hinges on a price-to-earnings (P/E) ratio of 32 times for the year 2024, aligning with Alcon's historical averages.
Alcon has raised its full-year 2024 outlook for constant currency sales and core earnings per share (EPS) growth to 7%-9% and 15%-18%, respectively, up from the previous 6%-8% and 13%-16%. Despite this, the company has kept its reported sales and core EPS guidance unchanged, which may indicate an anticipation of significant currency headwinds.
The company reported a 5% increase in sales for the first quarter of 2024, which translates to 7% growth on a constant currency basis. This growth was seen across all divisions. Additionally, Alcon saw an improvement in its core operating margin by 1.4 percentage points, attributed to better operating leverage and the timing of discretionary spending.
CFRA's forecasts for Alcon's sales growth remain at approximately 5%-6% for both 2024 and 2025, with expectations for core operating margin to rise to between 20.5% and 22.0%, up from 19.7% in 2023. This optimistic outlook is supported by the company's key growth platforms and operational efficiencies.
The firm's EPS estimates are set at $3.00 for 2024 and $3.40 for 2025, which are at the lower end of Alcon's own guidance range for 2024.
InvestingPro Insights
Alcon Inc. (ALC:SW) (NYSE: ALC) has been a topic of interest following CFRA's Buy rating and the company's optimistic financial outlook. Delving into the real-time data from InvestingPro, Alcon's market capitalization stands at a robust $40.36 billion, reflecting its significant presence in the eye care industry. The P/E ratio, a key metric highlighted by CFRA, is currently at 38.82, which is slightly higher than CFRA's forecast of 32 for 2024, potentially indicating a premium that investors are willing to pay for Alcon's growth prospects.
InvestingPro Tips suggest that Alcon has a track record of raising its dividend, with increases for 4 consecutive years, and is trading at a low P/E ratio relative to its near-term earnings growth, offering a potentially attractive entry point for dividend-seeking investors. Additionally, the company's liquid assets exceed its short-term obligations, underscoring its financial stability. For those looking to delve deeper into Alcon's financial health, InvestingPro provides an array of additional tips—there are 10 more available, which can be accessed with a subscription. Interested readers can use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
With a revenue growth of 8.47% over the last twelve months as of Q4 2023, Alcon is demonstrating its ability to expand its top line effectively. The gross profit margin stands at a healthy 55.49%, indicative of the company's strong pricing power and cost management. As investors consider Alcon's potential, these figures provide a quantitative backdrop to CFRA's qualitative analysis and the company's own forward-looking statements.
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