Medical supplier Cooper Companies Inc COO outperformed first-quarter estimates on an operational basis, and its key account strategy should support share gains, according to Raymond James.
The Analyst
Raymond James’ Lawrence Keusch maintains an Outperform rating on Cooper Companies, while raising the price target from $300 to $325.
The Thesis
Cooper reported strong first-quarter results Tuesday, with EPS of $2.88 versus Street expectations of $2.50.
The EPS beat was driven by solid revenue growth, which was 2 percent higher than the consensus estimate, Keusch said in a Wednesday note.
The contact lens manufacturer raised its FY19 revenue and EPS guidance to $2.631-$2.676 billion and $11.85-$12.15, respectively. The EPS guidance compares favorably with the prior consensus estimate of $11.57.
While the guidance raise factored in first-quarter outperformance, it also reflected confidence in the Europe and Middle East, “where a good portion of the key account strategy is taking hold,” the analyst said.
The full-year EPS projection reflects 4 cents per share of operational improvement. This comes despite the large investments made in the CooperVision salesforce and direct-to-consumer advertising for the Paragard IUD, Keusch said, adding that the investments should drive durable sales growth and margin expansion for Paragard.
Price Action
Cooper Companies shares were down 1.54 percent at the time of publication Wednesday.
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