Oppenheimer Initiates Coverage On Cooper Companies

Oppenheimer initiated coverage on Cooper Companies Inc COO Tuesday with an Perform rating and $170 price target.

Analysts Steven Lichtman and Steven Reiman noted that “COO's subsidiary, CooperVision (81 percent '14 rev.), is the world's third largest manufacturer of soft contact lenses and has been a market share gainer as it has transitioned from a specialty manufacturer to full-market provider.

“COO is looking to continue this momentum as it leverages its acquisition of UK-based Sauflon Pharmaceuticals to build a stronger presence in the fast growing single-use lens market.”

Lichtman commented that the “single-use market is projected to be the fastest growing lens market (8-9 percent CAGR through '19) driven primarily by increased adoption in the US. COO has historically been under-indexed in this segment but is making aggressive moves to capture share in this $3B market highlighted by the 6/14 Sauflon acquisition.”

The analyst noted cited three major risks: “1) Competition. JNJ and Alcon/CIBA (Novartis) have strong presence in the optometrist's office. 2) US Sauflon adoption. Sauflon has relatively low name recognition in the US. 3) Foreign currency. COO has significant FX exposure and does not hedge.”

Cooper Companies Inc recently traded at $156.09, up 0.08 percent.