Bank of America Securities analyst Julien Ouaddour downgraded the rating on Alcon to a Sell today, setting a price target of CHF60.00.
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Julien Ouaddour has given his Sell rating due to a combination of factors impacting Alcon’s outlook. The company has faced a challenging year with market slowdowns, increased competition, and reduced guidance, which have collectively led to a 15% decline in shares year-to-date. Despite some investor optimism for a recovery by 2026, Ouaddour believes that the consensus expectations are overly optimistic, particularly regarding a sharp rebound and ambitious growth plans for the Unity product, which currently lacks visibility.
Furthermore, Ouaddour’s forecasts for Alcon’s earnings per share (EPS) for fiscal years 2026 and 2027 are below consensus estimates, with concerns about margin pressures and a stretched valuation at approximately 25 times the 12-month forward price-to-earnings ratio. The anticipated earnings growth of less than 10% from fiscal years 2025 to 2027 does not justify the current valuation premium over its European MedTech peers. Additionally, the slower-than-expected rollout of the Unity product has been a significant disappointment, undermining the bull case for Alcon and adding to the downside risk for the stock.