Cooper Companies Banks On Specialty Lenses, Competition Rife

On Mar 13, we issued an updated research report on The Cooper Companies (NYSE:COO) . The company carries a Zacks Rank #3 (Hold). Cooper Companies maintained its leading position in the specialty lens market, supported by exclusive products like Biofinity and Clariti. However, intense competition in the contact lens space will continue to build pressure on pricing.

The company’s flagship silicone hydrogel lenses are expected to see strong sales in the coming quarters. In the first quarter of fiscal 2018, revenues increased on the back of silicone hydrogel lenses, led by the Clariti and MyDay in the dailies space and Biofinity in the monthly space.

The company is also focusing on expanding geographically. The launch of MyDay Toric daily disposable contact lenses in the United States is in line with this. Management believes that the Toric market will grow faster than the overall market and the company can cash in on the opportunity with its strong portfolio and the recent addition of MyDay Toric.

Moreover, Cooper Companies’ CooperVision segment is one of the key drivers. The segment gains from silicone hydrogel lenses, led by solid prospects in MyDay, Clariti and Biofinity platforms. The outlook for the contact lens industry is favorable.

We are encouraged to note that the Cooper Companies is progressing well with respect to inorganic expansion. In a bid to boost inorganic growth, Cooper Companies announced that CooperVision has completed the buyout of Paragon Vision Sciences in the fourth quarter of 2017.

Shares of Cooper Companies have gained 21.7% in the past year, outperforming the industry’s gain of 13.3%.

On the flip side, Cooper Companies operates in a highly competitive market. Both of the company’s business segments face considerable competition which continues to exert pressure on pricing.

Also, the company’s extensive international presence makes it highly vulnerable to fluctuations in exchange rates.

Key Picks

Some better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (NYSE:BIO) , athenahealth, Inc. (NASDAQ:ATHN) and PerkinElmer (NYSE:PKI) .

Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).

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