On Jul 5, Zacks Investment Research upgraded
The Cooper Companies Inc.
) to a Zacks Rank #2 (Buy) from a Zacks Rank #3 (Hold).
Why the Upgrade?
The Cooper Companies reported impressive fiscal 2014-second-quarter
(ended Apr 30, 2014) results and a promising fiscal 2014 guidance
on Jun 5. Following the earnings release, shares of the company
have been on an upward trend and have climbed 10.9% over the last
The Cooper Companies has been enjoying rising estimate revisions in
the past 30 days with nine upward estimate revisions and no
downward revision for 2014. The upward estimate revisions led to a
0.6% rise in the Zacks Consensus Estimate to $6.90 per share for
the year. Moreover, the company delivered positive earnings
surprises in the three of the last four quarters, with a positive
surprise of 1.9% in the last reported quarter.
Adjusted earnings per share scaled up 9.3% to $1.64 while revenues
increased 7.4% to $412.3 million for the fiscal
2014-second-quarter. Revenues were in line with the Zacks Consensus
The CooperVision (CVI) segment continues to gain traction across
all geographies driven by the company's silicone hydrogel products,
especially Biofinity and MyDay. Revenues in the CooperSurgical
(CSI) segment spiked 8.7% during the quarter, led by growth in its
The Cooper Companies also upgraded the lower-end of its earnings
outlook for fiscal 2014. Earnings are expected in the band of $6.78
to $7.00 compared with the earlier range of $6.75 to $7.00, while
adjusted earnings are projected in the $6.80-$7.00 range as against
the prior range of $6.75 to $7.00. The current Zacks Consensus
Estimate of $6.90 lies within the guided range.
The Cooper Companies continues to expect total revenue between $
1,685 and $1,725 million for the year, including CVI and CSI
revenues of $1,365-$1,395 million and $320-$330 million,
respectively. The current Zacks Consensus Estimate of $1,711
million lies within the guided range.
Recently, The Cooper Companies entered into a definitive agreement
to acquire European manufacturer and distributor of soft contact
lenses and solutions, Sauflon Pharmaceuticals Ltd, for $1.2
billion. The deal is expected to strengthen the company's CVI
portfolio with multi-tier daily strategy offerings.
The acquisition is anticipated to close before the end of fiscal
year and is expected to be accretive to The Cooper Companies'
earnings per share in fiscal 2015.
An encouraging guidance, increased M&A activity and strong
market share gains represent a potential upside for The Cooper
Companies going forward.
Other Stocks to Consider
Other well-performing stocks worth a look in the medical/dental
supply industry include
Becton, Dickinson and Company
Bio-Reference Laboratories Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
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