The Cooper Companies, Inc. (NYSE:COO) is expected to benefit from its fiscal fourth-quarter results and a strong CooperVision (CVI) unit. However, sluggishness in the Fertility unit might mar prospects.
The stock currently has a Zacks Rank #3 (Hold).
Price Performance
Over the past year, shares of Cooper have rallied 9.1% against the industry’s decline of 9.9%. The current level is also higher than the S&P 500 index’s 5.4% fall.
What’s Deterring the Stock?
In the recently-reported fiscal fourth quarter, Cooper’s Fertility unit saw sluggishness owing to channel inventory contraction associated with the LifeGlobal integration. Notably, sales at the unit was $60.9 million, down 9% year over year and 6% at pro forma. Moreover, genomics business within Fertility declined in the quarter.
Additionally, foreign currency fluctuations continue to plague the company. In the fiscal fourth quarter, Cooper incurred a loss of $1.7 million owing to negative currency movement.
Why Should You Retain Cooper?
Cooper reported fiscal 2018 earnings of $2.87 per share, which increased 8.3% on a year-over-year basis.
The company reported revenues worth $651.5 million. On a year-over-year basis, revenues improved 16%.
Cooper’s core CVI segment garnered revenues worth $480.6 million, up 10% on a pro forma basis and 9% year over year. Per management, the segment saw a noticeable uptick in the daily silicone hydrogel lenses, showing pro forma growth of 50% driven by accelerating growth in both Clariti and MyDay.
Additionally, the segment recorded strong growth across Americas, EMEA and Asia Pacific regions. Reflective of these, management expects CVI to grow 6-8% at pro forma in fiscal 2019. Per management, overseas growth was driven by clariti and MyDay strength and solid results from Biofinity and Avaira Vitality.
Cooper expects fiscal 2019 revenues within $2,600-$2,660 million. Notably, revenues from CVI are expected between $1,940 million and $1,980 million. The same from CooperSurgical (CSI) are anticipated within $660-$680 million.
The company also expects adjusted earnings per share between $11.30 and $11.70.
The Cooper Companies, Inc. Price and Consensus
The Cooper Companies, Inc. Price and Consensus | The Cooper Companies, Inc. Quote
Which Way Are Estimates Headed?
For the fiscal first quarter, the Zacks Consensus Estimate for earnings is pegged at $2.51 cents, reflecting a year-over-year decline of 10%. The same for revenues is pinned at $618.11 million, showing an increase of 4.8% year over year.
For fiscal 2019, the Zacks Consensus Estimate for revenues is at $2.64 billion, reflecting a rise of 4.3% year over year. The same for earnings stands at $11.65, showing growth of 1.3% year over year.
Key Picks
Some better-ranked stocks in the broader medical space are Integer Holdings Corporation (NYSE:ITGR) , OPKO Health, Inc. (NASDAQ:OPK) and Surmodics (NASDAQ:SRDX) .
Integer Holdings, with a Zacks Rank #2 (Buy), has an earnings growth rate of 31.2% for the next quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
OPKO Health’s long-term earnings growth rate is projected at 12%. The stock carries a Zacks Rank of 2.
Surmodics’ long-term earnings growth rate is estimated at 10%. The stock carries a Zacks Rank #2.
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Integer Holdings Corporation (ITGR): Free Stock Analysis Report
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The Cooper Companies, Inc. (COO): Free Stock Analysis Report
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