On Wednesday, Goldman Sachs (NYSE:GS) initiated coverage on Alcon Inc. (NYSE:ALC), issuing a Buy rating and setting a price target of $100.00. The firm outlined several key growth drivers for the company, citing strong market positions and the potential for share gains in various sectors of its business.
Alcon's core businesses have been demonstrating solid growth, buoyed by what Goldman Sachs views as robust market positions and appealing end markets. The firm identifies multiple avenues for incremental growth, including the Vision-Based Planning (VBP) in China as a catalyst for Alcon's AcrySof IQ Vivity Extended Vision Intraocular Lens (AT-IOL) share gains.
Goldman Sachs also anticipates further share gains in the contact lens market, propelled by the introduction of new products in the TOTAL30 portfolio and the upcoming launch of PRECISION7. Additionally, the firm sees potential upside from the Dry Eye segment in Ocular Health, through both over-the-counter (SYSTANE) and prescription products (AR-15512).
The analyst projects an average organic revenue growth of 6.9% for fiscal years 2024 through 2026, which is higher than the Visible Alpha Consensus Data forecast of 6.0%. Goldman Sachs' revenue estimates are approximately 1-2% above consensus for fiscal years 2025 and 2026, suggesting the possibility of positive surprises in Alcon's financial performance.
InvestingPro Insights
As Goldman Sachs initiates coverage on Alcon Inc. (NYSE:ALC) with a positive outlook, the latest metrics from InvestingPro support the potential for growth. Alcon's market capitalization stands robust at $40.99 billion, reflecting its significant presence in the industry. The company's revenue has grown by 8.47% over the last twelve months as of Q4 2023, indicating a strong financial trajectory that aligns with Goldman Sachs' growth expectations.
InvestingPro Tips highlight that Alcon has consistently raised its dividend for the past four years, a sign of financial health and commitment to shareholder returns. Moreover, the company is trading at a low P/E ratio relative to near-term earnings growth, suggesting it may be undervalued compared to its growth prospects. This could be of particular interest to investors looking for value in a market that often commands high premiums for growth.
For those considering an in-depth analysis, InvestingPro offers additional insights and metrics. There are 11 more InvestingPro Tips available at https://www.investing.com/pro/ALC, which can provide a more comprehensive understanding of Alcon's financial health and market position. Interested readers can take advantage of these tips and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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