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Alcon (CH:ALC)
:ALC
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Alcon
(NYSE:ALC)
Rating:73Outperform
Price Target:
CHF82.00
â–²(17.38%Upside)
Positive Factors
FDA Approval
FDA approval has been secured for TRYPTYR, the drug is indicated for both the signs and symptoms of dry eye disease, which is a significant milestone for ALC.
Product Launches
The product launch cycle is expected to fuel appealing exit rates for 2026, enhancing growth prospects.
Technological Advancements
Unity DX is a 6-in-1 'whole-eye' analyzer for the clinic, expected to help drive AT-IOL adoption, reduce AT-IOL pre-op time by up to ~50%, lower equipment acquisition cost by up to ~40%, and reduce refractive error with better lens selection.
Negative Factors
Financial Performance
Equipment sales missed significantly with a -6% growth at constant currency as demand moderated for legacy devices ahead of the UNITY launch.
Market Competition
TRYPTYR will be entering a competitive market environment, facing established products like BLCO's Miebo and others, which could impact its adoption.
Market Conditions
The contact lens market is experiencing a slowdown due to lower consumer confidence.
Alcon (ALC) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF34.91B
Dividend Yield0.32%
Average Volume (3M)899.15K
Price to Earnings (P/E)34.8
Beta (1Y)0.94
Revenue Growth3.90%
EPS Growth6.76%
CountryCH
Employees25,599
SectorHealthcare
Sector Strength39
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)0.61
Shares Outstanding499,700,000
10 Day Avg. Volume954,263
30 Day Avg. Volume899,147
Financial Highlights & Ratios
PEG Ratio-0.40
Price to Book (P/B)1.43
Price to Sales (P/S)0.00
P/FCF Ratio113.19
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue1.12
Enterprise Value/Gross Profit13.66
Enterprise Value/Ebitda4.86
Forecast
1Y Price Target
CHF87.28Price Target Upside24.94% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
Alcon Business Overview & Revenue Model
Company DescriptionAlcon (ALC) is a global leader in eye care, dedicated to helping people see brilliantly. The company operates in two main segments: Surgical and Vision Care. Alcon provides innovative products across these sectors, including advanced surgical equipment and devices for cataract, retinal, and refractive surgery, as well as a wide range of contact lenses and lens care products.
How the Company Makes MoneyAlcon generates revenue primarily through the sale of its eye care products and surgical equipment. In the Surgical segment, revenue is driven by sales of equipment and consumables used in eye surgeries, such as cataract and vitreoretinal surgeries. The Vision Care segment generates income from the sale of contact lenses and lens care solutions. Alcon's earnings are bolstered by its strong global distribution network, strategic partnerships with eye care professionals, and continuous investment in research and development to innovate and expand its product offerings. Additionally, Alcon benefits from an increasing demand for eye care solutions due to an aging population and rising awareness of vision health.
Alcon Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: -11.79%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed view with notable achievements in product launches and strategic acquisitions, contributing to future growth. However, these positive trends were tempered by challenges such as tariff impacts, a soft US surgical market, and sales declines in certain segments. Overall, the sentiment is balanced.Q1-2025 Updates
Positive Updates
Sales Growth and Core Operating Margin
Alcon delivered sales of $2.5 billion with a sales growth of 3%. The company also achieved a core operating margin of 20.8% and core diluted earnings of $0.73 per share.
Successful Product Launches
The company launched Unity VCS and PanOptix Pro, marking significant advancements in ophthalmic surgery and intraocular lens technology. These products are expected to boost future growth.
Acquisition and Strategic Initiatives
Alcon acquired a majority position in Aurion Biotech, focusing on corneal transplantation, and entered into a definitive merger agreement to acquire LENSAR, enhancing their innovative equipment portfolio.
Strong Performance in Contact Lenses
The PRECISION1 family, TOTAL30 family, and DAILIES TOTAL1 for astigmatism grew double digits in the first quarter, demonstrating strong market acceptance and growth potential.
Vision Care Segment Growth
Vision care sales reached $1.1 billion, with contact lens sales growing by 4% to $688 million, driven by product innovation and price increases.
Negative Updates
Tariff Impact and Headwinds
Alcon faces a potential $80 million impact from tariffs, particularly affecting cost of sales in the second half of the year.
Challenges in the US Surgical Market
The US surgical market remains soft, impacting implantables sales, which were flat year-over-year at $420 million.
Impact of Product Divestitures
The divestiture and out-licensing of eye drops to OcuMension in China in 2024 created a 1% headwind to sales growth.
Decline in Equipment Sales
Equipment sales were down 6% year-over-year, although they are expected to improve with the launch of Unity VCS.
Company Guidance
During Alcon's first quarter 2025 earnings call, the company provided several financial metrics and guidance for the year. Alcon reported sales of $2.5 billion with a sales growth of 3%, a core operating margin of 20.8%, and core diluted earnings of $0.73 per share. The guidance for the full year was updated to reflect a revenue range of $10.4 billion to $10.5 billion, with anticipated constant currency sales growth of 6% to 7%. The company expects a full-year core operating margin between 20% and 21%, impacted by about 80 basis points due to recent business development and licensing activities. Core diluted earnings per share are projected to be between $3.05 and $3.15, which translates to year-over-year growth of 2% to 5% in constant currency. Alcon is also navigating tariff impacts, estimated to pressure cost of sales by approximately $80 million for the year, with strategies to offset these through operational actions and currency benefits. Additionally, the company highlighted the anticipated acceleration of sales growth in the second half of the year driven by new product launches such as Unity VCS, PanOptix Pro, and PRECISION7.Alcon Financial Statement Overview
Summary
Alcon is financially robust with strong revenue and profit growth. The income statement shows improved margins, the balance sheet reflects low leverage and high equity ratios, and cash flow statements demonstrate excellent liquidity and cash generation. Overall, Alcon is well-positioned for sustained growth.Income Statement
Alcon's income statement shows strong growth and profitability. The gross profit margin increased to 55.6%, indicating efficient cost management. Net profit margin improved to 10.3%, reflecting robust earnings growth. Revenue growth rate from the previous year was 4.8%, maintaining a positive trajectory. EBIT margin increased to 14.3% and EBITDA margin to 27.0%, suggesting enhanced operational efficiency. Overall, Alcon's income statement reflects a solid financial performance with improving margins and consistent revenue growth.88
Very Positive
Balance Sheet
Alcon's balance sheet is stable with a debt-to-equity ratio of 0.24, indicating a low level of leverage, which reduces financial risk. Return on equity improved to 4.7%, showing better utilization of equity. The equity ratio is strong at 71.0%, underscoring a robust financial structure. The balance sheet reflects a well-capitalized company with low reliance on debt, although there is room for improvement in returns to shareholders.82
Very Positive
Cash Flow
Alcon's cash flow statement is very strong, with a significant free cash flow growth rate of 161.9%, highlighting excellent cash generation. The operating cash flow to net income ratio is 2.04, indicating efficient cash conversion. The free cash flow to net income ratio of 1.38 further confirms strong cash flow management. Overall, the cash flow statements point to excellent liquidity and financial flexibility, supporting future growth and investment.90
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.46B | 9.91B | 9.46B | 8.72B | 8.29B | 6.83B |
| Gross Profit | 5.25B | 5.51B | 5.25B | 4.75B | 4.65B | 2.94B |
| EBITDA | 2.11B | 2.68B | 2.24B | 1.72B | 1.76B | 1.11B |
| Net Income | 974.00M | 1.02B | 974.00M | 335.00M | 376.00M | -531.00M |
Balance Sheet | ||||||
| Total Assets | 29.61B | 30.35B | 29.61B | 29.21B | 28.00B | 27.60B |
| Cash, Cash Equivalents and Short-Term Investments | 1.10B | 1.83B | 1.10B | 980.00M | 1.58B | 1.56B |
| Total Debt | 5.13B | 5.14B | 5.13B | 5.07B | 4.48B | 4.50B |
| Total Liabilities | 8.99B | 8.79B | 8.99B | 9.53B | 8.74B | 8.78B |
| Stockholders Equity | 20.62B | 21.55B | 20.62B | 19.68B | 19.26B | 18.82B |
Cash Flow | ||||||
| Free Cash Flow | 596.00M | 1.41B | 537.00M | 472.00M | 165.00M | 256.00M |
| Operating Cash Flow | 1.39B | 2.08B | 1.39B | 1.22B | 1.34B | 823.00M |
| Investing Cash Flow | -1.09B | -1.17B | -1.09B | -1.86B | -1.20B | -572.00M |
| Financing Cash Flow | -211.00M | -322.00M | -211.00M | -8.00M | -123.00M | 466.00M |
Alcon Technical Analysis
Negative
69.86
Price Trends
73.42
Negative
76.32
Negative
77.80
Negative
Market Momentum
-0.77
Negative
42.66
Neutral
40.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:ALC, the sentiment is Negative. The current price of 69.86 is below the 20-day moving average (MA) of 70.60, below the 50-day MA of 73.42, and below the 200-day MA of 77.80, indicating a bearish trend. The MACD of -0.77 indicates Negative momentum. The RSI at 42.66 is Neutral, neither overbought nor oversold. The STOCH value of 40.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:ALC.
Alcon Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | CHF186.74B | 17.19 | 3.57% | 6.34% | -13.16% | ||
77 Outperform | CHF16.78B | 43.40 | 0.90% | 3.82% | 57.08% | ||
74 Outperform | CHF209.85B | 25.04 | 26.76% | 3.73% | 3.03% | -27.86% | |
73 Outperform | CHF34.91B | 34.79 | 5.23% | 0.32% | 3.90% | 6.76% | |
67 Neutral | CHF38.28B | 62.69 | 0.71% | -2.13% | 2.50% | ||
63 Neutral | CHF22.60B | 15.13 | 10.81% | 2.13% | 47.85% | -11.82% |
* Healthcare Sector Average
Performance Comparison
CH:ALC
Alcon
69.86
-10.46
-13.02%
CH:NOVN
Novartis AG
98.12
4.26
4.54%
CH:LONN
Lonza Group Ltd
560.20
61.09
12.24%
CH:STMN
Straumann Holding AG
105.25
-11.57
-9.90%
CH:ROG
Roche Holding AG
260.00
24.10
10.22%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.