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Alcon shares target raised to $96 by KeyBanc on strong outlook

EditorLina Guerrero
Published 05/14/2024, 04:27 PM

On Tuesday, KeyBanc Capital Markets demonstrated confidence in Alcon Inc. (NYSE:ALC) by increasing the company's price target to $96 from the previous $92, while retaining an Overweight rating on the stock. This adjustment reflects a positive assessment of the company's first quarter of 2024 performance and its potential for future growth.

Alcon, a company specializing in eye care products, has shown a promising start to the year, which has influenced KeyBanc's decision to raise its price target. The firm acknowledges Alcon's strong positioning to achieve its long-term financial goals. The analyst from KeyBanc highlighted several drivers for Alcon's continued market outperformance in its Vision Care and Surgical divisions.

The report also noted Alcon's progress in operating margin expansion, which is on track to meet the company's mid-20s percentage target by 2027. This is particularly noteworthy given the greater than expected foreign exchange headwinds the company is facing.

Additionally, Alcon has made a recent strategic move with a small tuck-in acquisition. This is indicative of the company's ongoing flexibility in capital allocation, which could support further growth and value creation for shareholders.

KeyBanc's updated analysis of Alcon's stock comes as the firm sees a clear path for the company's sustained market leadership in its respective sectors, backed by long-term growth drivers. The Overweight rating suggests that KeyBanc sees Alcon's shares as a potentially better investment than others in the sector, based on expected total return.

InvestingPro Insights

Following KeyBanc Capital Markets' optimistic outlook on Alcon Inc. (NYSE:ALC), a deeper dive into the company's financials through InvestingPro reveals some compelling data points. Alcon's market capitalization stands strong at $44.03 billion, reflecting the market's confidence in its stability and growth prospects. The company's commitment to enhancing shareholder value is evident in its consistent dividend growth, having raised its dividend for 4 consecutive years, which is a positive signal for investors looking for income-generating stocks.

Moreover, Alcon's stock is trading at a P/E ratio of 41.63, which, when juxtaposed with its PEG ratio of 0.22, suggests that the stock may be trading at a low price relative to near-term earnings growth potential. This could indicate an attractive entry point for investors considering the stock's potential for future earnings expansion. Additionally, with a strong return of 5.86% over the last three months, Alcon is demonstrating its capability to generate significant returns for its investors.

For those seeking more comprehensive analysis, InvestingPro offers additional InvestingPro Tips that could further guide investment decisions. Currently, there are 13 additional tips available for Alcon on InvestingPro. To explore these insights and make more informed investment choices, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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