Baird Says Buy Cooper Companies At Current Levels

Cooper Companies Inc COO hosted investor meetings this week. Following meetings with management, Baird’s Jeff D. Johnson maintained an Outperform rating for the company, with a price target of $185.

Analyst Jeff Johnson commented that the investor meetings increased confidence in “the sustainability of recent above-market contact lens revenue growth and potential for solid double-digit EPS growth over the next several years.”

New Product Perspective

Cooper Companies’ new product pipeline appears to be good and more robust than that of any of its competitors, Johnson noted.

Margin perspective

Gross margins across all four of Cooper Companies’ key product lines, namely clariti, MyDay, Biofinity and Avaira, seem to have significant expansion opportunity over the next few years. “In our view, such GM% improvements should be more than enough to help COO’s company-wide OM% expand at least 100bp annually over the next few years,” the analyst wrote.

Looming Vita Monthly SiHy Launch

Johnson & Johnson JNJ is preparing to launch of its Vita monthly SiHy next week, which has led to investors focusing more on near-term risks Cooper Companies.

“But we continue to believe risk of near-term disruption to COO from JNJ’s Vita launch next week is smaller than what we saw late last year with the OASYS 1-Day launch, and as such we continue to like risk/reward with this stock and remain buyers at current levels,” Johnson added.