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Here's Why You Should Bet on Cooper Companies (COO) Stock Now

Zacks Equity Research

The Cooper Companies, Inc. COO is well poised for growth on the back of strong segmental performances, increasing penetration in international markets and solid gains from its core CooperVision (CVI) unit.

The stock carries a Zacks Rank #2 (Buy).

Price Performance

Shares of Cooper Companies have gained 14.7%, outperforming the industry’s growth of 12.5% on a year-to-date basis. Moreover, the stock outpaced the S&P 500 Index’s rally of 14.6%.



What’s Favoring the Stock?

Driven by a highly exclusive product portfolio featuring the likes of Biofinity and Clariti, Cooper Companies has been able to maintain its leading position in specialty lenses markets. Notably, the company’s flagship silicone hydrogel lenses are anticipated to generate strong sales in the near term. We expect the company’s MyDay and Clariti lenses to further strengthen and bolster its growth prospects.

Moreover, the company’s CooperVision segment has been garnering success globally and fortifying its foothold through developments such as Eye care professional (ECP) programs in Australia and New Zealand.

This apart, the aforementioned segment remains focused on multiple initiatives that will increase the adoption of its innovative MiSight 1 day product across major world markets.

For fiscal 2019, management expects revenues at CSI to grow 3-6% at pro forma.

With respect to CooperSurgical (CSI), its expanding product portfolio has been benefiting the segment consistently. Recently, the company inked a deal to purchase the flagship contraception platform of Israel-based Teva Pharmaceutical Industries (TEVA) — PARAGARD Intrauterine Device. The transaction is expected to bolster Cooper Companies’ CooperSurgical (CSI) business in the global contraceptive device market.

Notably, revenues from CSI are anticipated within the range of $663 million to $681 million, up from the previous guidance of $660-$680 million.

Strategic acquisitions play an important role with respect to company’s long-term growth prospects. CSI’s acquisition of Incisive Surgical and CVI’s buyout of Blanchard contact lenses are expected to prove beneficial for the respective segments, which in turn will fuel growth.

An upgraded fiscal 2019 guidance is also favoring the stock. Currently, the company expects adjusted revenues in the $2.63-$2.68 billion band compared with $2.60-$2.66 billion projected earlier. This represents year-over-year growth in the band of 6-7% on a pro-forma basis. Cooper Companies expects adjusted earnings per share in the $11.85-$12.15 band compared with the previous guidance of $11.30-$11.70.

Which Way Are Estimates Headed?

For fiscal 2019, the Zacks Consensus Estimate for revenues is pegged at $2.66 billion, reflecting year-over-year improvement of 4.9%. The same for earnings stands at $12.01, exhibiting year-over-year growth of 4.4%.

The Cooper Companies, Inc. Price and Consensus

 

The Cooper Companies, Inc. Price and Consensus | The Cooper Companies, Inc. Quote

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Other Stocks to Consider

Some other top-ranked stocks from the broader medical space include Addus HomeCare Corporation ADUS, Invacare Corporation IVC and DENTSPLY SIRONA Inc. XRAY, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Addus HomeCare has a long-term earnings growth rate of 15.5%.

Invacare Corporation has an earnings growth rate of 29.3% for the next quarter.

DENTSPLY SIRONA has a long-term earnings growth rate 9.6%.

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