What This Analyst Expects From Cooper Companies Q3 Earnings

  • Needham expects Cooper Companies Inc COO to miss F3Q22 consensus revenue and EPS estimates due to unfavorable currency, lockdowns in China, and incremental interest expense when it releases earnings next week. 
  • The analyst also expects the management to lower its FY22 revenue and EPS guidance to account for macro headwinds and FY22 Myopia Management revenue expectations due to currency and lockdowns in China.
  • When Needham initiated coverage, the Hold thesis was based on the limited upside to estimate of a high-single-digit EPS CAGR through FY24. 
  • "While we believe Cooper Companies can continue to gain contact lens market share given the breadth of its CooperVision portfolio, we expect the MiSight myopia management contact lens launch to require further investment to develop the market and to therefore be a headwind to margins," the analyst wrote.
  • Given the premium pricing, MiSight's launch momentum could slow in a recessionary environment. 
  • PARAGARD is expected to face continued headwinds in F3Q22 as women shift to birth control, increased telemedicine trends, and gain from OB/GYN office visits in the long run.
  • Related: Cooper Companies Scoops Up Cook Medical's Reproductive Health Business For $875M.
  • With the Cook Medical Reproductive Health deal still pending, post-close EPS is expected to be lower than expected, says the analyst citing its international exposure
  • Price Action: COO shares are down 0.57% at $309.56 on the last check Wednesday.
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