Needham is initiating coverage on Alcon AG (NYSE:ALC) with a Buy rating and a $95 price target.
- The analysts believe Alcon has visibility into sustainable mid-single-digit or better revenue growth driven by key implantable products, contact lenses, and ocular health.
- Margin improvements are expected to be driven by manufacturing, product mix, and opex leverage.
- The analysts estimate Alcon can see above-peer EPS growth through 2024.
- Related: Alcon's Q4 Earnings Surpass Expectations, Proposes CHF 0.20/Share Dividend.
- "We believe recent advanced technology IOL (AT-IOLs) launches could help ALC's Implantables segment grow faster than the market's 6% pace. Analysts write that every ~100 bps increase in AT-IOL market penetration translates into $100 million in revenue (~120 bps to ALC's growth)."
- Premium contact lens launches are expected to result in mid-to-high single-digit growth.
- Needham expects the mid-single-digit or better revenue growth and steady adjusted operating margin improvement in their estimates will support a 13.6% EPS CAGR from 2021 through 2024.
- Price Action: ALC shares are down 0.30% at $81.01 during the market session on the last check Friday.
