UPDATE: JP Morgan Upgrades The Cooper Companies to Overweight on Recent Pullback

JP Morgan raised its rating on The Cooper Companies

from Neutral to Overweight and increased its price target from $92 to $96. JP Morgan noted, "We are upgrading Cooper shares from Neutral to Overweight following the recent pullback in the shares and ahead of what should be a strong 3Q and 2H12 despite difficult YOY comparisons. Cooper offers a combination of (1) attractive top-line growth (in our view, sustainable at 6+%), improving margins (+230bps over the next 3 years), solid cash flows ($4.80 in FCF), and a reasonable valuation (12x NTM EPS exCiba royalty). With a solid top-line, margin expansion should be driven by: (1) SG&A leverage and favorable mix (FY13-14), followed by (2) a meaningful GM lift in FY14-FY17 as the Ciba patents expire in the US (Sept'14) and overseas (March '16), turning in sustainable EPS growth of 12-14% by our estimates." The Cooper Companies closed at $78.17 on Tuesday.