What Analysts Are Saying About Cooper Companies

Cooper Companies Inc COO reported fiscal Q1 earnings Thursday and beat expectations.

The stock soared nearly 10 percent following the news and traded at $180.53 on Friday.

Analysts weighed in on the results and were positive overall. Below are highlights along with current ratings and price targets.

BMO Capital Markets - Outperform, $180 price target

"This was the solid, clean quarter that we were looking for, including early momentum in its one-day SiH franchise, the integration of Sauflon that appears at least on track, and margins that were truly impressive. Gross margins were 64.2 percent (well ahead of the Street's estimate of 61.6 percent) and SG&A declined to 37.6 percent from 39.0 percent y/y, driving operating margins to 23.0 percent from 22.0 percent y/y."

The report mentioned that risks to the price target include, "1) the competitive contact lens market, in particular, the silicone hydrogel segment; 2) capacity constraints and efforts to expand production and improve yield; 3) acquisition integration of Sauflon in the CVI franchise; and 4) financial leverage."

Oppenheimer - Perform, $178 price target

"Midpoint of FY15 sales guidance was reduced to $1.88B from $1.93B on continued FX headwinds, although midpoint of EPS range was essentially unchanged ($7.55 vs. $7.50) with stronger margins providing the offset. Overall, solid leverage in a tough FX environment. Our focus continues to be on US uptake of clariti, the rollout of which is currently underway."

The analyst also mentioned that, "Toric/Multifocal (+9 percent/+23 percent CC) came in ahead of our estimates as COO continues to dominate these specialty segments. Management noted that Biofinity had a particularly strong quarter as the product's geographic reach/parameters continue to expand. CSI sales (0 percent) were softer than expected on the removal of certain low-margin fertility products from the portfolio."

William Blair - Outperform, no price target

"We anticipate that the company will continue to deliver strong top-line growth catalyzed by accelerating growth in the clariti and MyDay offerings (silicone hydrogel one-day modality) and the ability close the gap in two-week and monthly products where the company's penetration is still below industry averages (64 percent for Cooper versus 73 percent for the industry). So while currency headwinds and transient issues associated with the clariti launch are topics du jour, when we look out on a multiyear basis, we believe this business remains in excellent shape with meaningful operating leverage opportunities that should lead to EPS growth in the double digits." 

The report continued, "For this reason and what we see as a relatively safer risk profile versus many other options at this cap size, we continue to rate the stock Outperform even at the premium valuation it enjoys today of 22 times our 2015 target EPS (the three-year range is 14 times to 23 times). We encourage investors to remain invested in this durable midcap franchise."