Alcon Reports "High Quality" EPS Beat
JP Morgan has published a research report on Alcon, Inc. (NYSE: ACL) after the company reported strong 3Q results last night.
In the report, JP Morgan writes "For 2010, we are raising our EPS forecast by a penny to $7.68 and raising our organic sales growth forecast to 8.7% from 7.6%. We are lowering our 4Q forecast by $0.05 to $1.71, mainly to account for the 4Q inventory impact on gross margin. Our 4Q sales estimate comes up by $16M to $1,807M. Recall that we had raised our 2010 forecast for Alcon just last week to the $7.67 number. However, we had not accounted for the temporary gross margin pressure from higher cost inventory working through the P&L, which is leading us to temper our 4Q forecast today. Recall that Alcon's 2Q result included an outsized benefit to GM from lower cost inventory, following a period of rapid strengthening for the dollar. Here in the 4Q, we will see the opposite effect on the heels of the dollar's weakening. For 2011, our EPS estimate is unchanged at $8.50."
JP Morgan maintains its Neutral rating and $181 price target.
Alcon, Inc. closed yesterday at $168.76.
