Alcon (ALC) AI Stock Analysis

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Alcon

(NYSE:ALC)

77Outperform

Alcon scores well due to its robust financial performance, characterized by strong revenue growth and excellent cash flow management. The technical analysis shows moderate positive indicators, supporting a stable outlook. However, a high P/E ratio suggests the stock may be overvalued, which, along with market challenges highlighted in the earnings call, tempers the overall score. Despite these valuation concerns, the company's strategic direction and innovative product pipeline offer potential for future growth.

Positive Factors

Acquisitions

ALC acquired a majority interest in Aurion Biotech, potentially enhancing its strategic positioning and product offerings.

Financial Performance

The LRP guidance suggests strong revenue and EPS growth with high free cash flow conversion, indicating robust financial health.

Product Launches

Alcon's new product launches are set to drive significant above-market growth, bolstering its competitive advantage.

Negative Factors

Competitive Landscape

The competitive landscape for IOLs may appear increasingly fiercer, potentially impacting market share.

Operating Expenses

Aurion’s operating expenses are expected to reduce ALC’s Core Operating Margin and Core EPS in FY25.

Alcon (ALC) vs. S&P 500 (SPY)

Market Cap

$39.80B

Dividend Yield0.28%

Average Volume (3M)1.12M

Price to Earnings (P/E)44.5

Beta (1Y)0.98

Revenue Growth2.72%

EPS Growth2.43%

CountryCH

Employees25,599

SectorHealthcare

Sector Strength46

IndustryMedical - Instruments & Supplies

Share Statistics

EPS (TTM)0.64

Shares Outstanding499,700,000

10 Day Avg. Volume753,092

30 Day Avg. Volume1,124,992

Financial Highlights & Ratios

PEG Ratio-2.83

Price to Book (P/B)2.20

Price to Sales (P/S)0.00

P/FCF Ratio63.75

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$91.30

Price Target Upside14.38% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering19

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 Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
9.64B	9.91B	9.46B	8.72B	8.29B	6.83B
	Gross Profit
5.33B	5.51B	5.25B	4.75B	4.65B	2.94B
	EBIT
1.19B	1.41B	1.04B	672.00M	580.00M	-511.00M
	EBITDA
2.31B	2.68B	2.24B	1.72B	1.76B	1.11B
	Net Income Common Stockholders
1.10B	1.02B	974.00M	335.00M	376.00M	-531.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
172.00M	1.83B	1.10B	980.00M	1.58B	1.56B
	Total Assets
27.39B	30.35B	29.61B	29.21B	28.00B	27.60B
	Total Debt
195.00M	5.14B	5.13B	5.07B	4.48B	4.50B
	Net Debt
23.00M	3.31B	4.04B	4.09B	2.90B	2.94B
	Total Liabilities
4.36B	8.79B	8.99B	9.53B	8.74B	8.78B
	Stockholders Equity
23.03B	21.55B	20.62B	19.68B	19.26B	18.82B
Cash Flow		Free Cash Flow
1.15B	1.41B	537.00M	472.00M	165.00M	256.00M
	Operating Cash Flow
1.85B	2.08B	1.39B	1.22B	1.34B	823.00M
	Investing Cash Flow
-877.00M	-1.17B	-1.09B	-1.86B	-1.20B	-572.00M
	Financing Cash Flow
-282.00M	-322.00M	-211.00M	-8.00M	-123.00M	466.00M

Alcon Technical Analysis

Technical Analysis Sentiment

Positive

Last Price79.82

Price Trends

50DMA

79.03

Positive

100DMA

79.13

Positive

200DMA

79.88

Negative

Market Momentum

MACD

0.51

Negative

RSI

55.01

Neutral

STOCH

37.84

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:ALC, the sentiment is Positive. The current price of 79.82 is above the 20-day moving average (MA) of 77.12, above the 50-day MA of 79.03, and below the 200-day MA of 79.88, indicating a neutral trend. The MACD of 0.51 indicates Negative momentum. The RSI at 55.01 is Neutral, neither overbought nor oversold. The STOCH value of 37.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:ALC.

Alcon Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOVN	78 Outperform	CHF176.85B	16.28		3.85%	6.34%	-13.16%
ALC	77 Outperform	$39.80B	44.49	4.83%	0.28%	2.72%	2.43%
ROG	74 Outperform	$219.17B	26.19	26.76%	3.54%	3.03%	-27.86%
STMN	73 Outperform	CHF17.04B	44.08		0.90%	3.82%	57.08%
LONN	58 Neutral	CHF42.18B	67.12		0.67%	-2.13%	2.50%
Sector *	52 Neutral	$5.15B	3.56	-42.52%	2.83%	14.56%	-0.53%

* Healthcare Sector Average

Performance Comparison

CH:ALC

Alcon

79.82

5.72

7.72%

CH:NOVN

Novartis AG

90.91

1.05

1.17%

CH:LONN

Lonza Group Ltd

584.80

68.40

13.25%

CH:STMN

Straumann Holding AG

106.90

-12.25

-10.28%

CH:ROG

Roche Holding AG

257.60

37.09

16.82%

Alcon Earnings Call Summary

Earnings Call Date:Feb 26, 2025

(Q4-2024)

% Change Since: -5.56%|

Next Earnings Date:May 14, 2025

Earnings Call Sentiment Neutral

Alcon demonstrated strong financial performance with record sales and free cash flow, driven by innovations and expansion in international markets. However, the company faced significant challenges in the US market due to competitive pressures and foreign exchange impacts. Despite these challenges, Alcon's product pipeline and strategic investments position it well for future growth.

Q4-2024 Updates

Positive Updates

Strong Financial Performance in 2024

Alcon reported sales of $9.8 billion with above-market sales growth of 6%. Core diluted EPS grew by 16% to $3.05, and the company generated a record $1.6 billion of free cash flow.

Significant Product Pipeline and Innovations

Alcon laid the groundwork for launching one of the richest product pipelines in its history, including UNITY VCS, PanOptix Pro, and Voyager Direct Selective Laser Trabeculoplasty device.

Growth in Vision Care and Contact Lenses

Vision Care sales increased by 7% in the fourth quarter, driven by an 11% growth in contact lens sales, particularly in innovative lenses like toric and multifocal modalities.

Successful Expansion in China

Alcon experienced significant share growth in China, particularly in the ATIOL segment, contributing to stable global share despite competitive pressures in the US.

Negative Updates

Competitive Pressures in the US Market

Alcon faced competitive pressures in the US, particularly in the ATIOL market, resulting in a loss of share despite stable global performance.

Impact of Foreign Exchange

The company expects a 2-point foreign exchange headwind for 2025, impacting sales growth and financial performance.

Challenges in US Sales and Market Conditions

The US market experienced slower growth in implantables and competitive trialing affecting revenue. The Surgical franchise growth was partially offset by these market conditions.

Company Guidance

In the Alcon Fourth Quarter and 2024 Earnings Call, the company reported sales of $9.8 billion for 2024, reflecting a 6% growth rate. Their core diluted EPS saw a significant increase of 16% to $3.05, and they generated a record $1.6 billion in free cash flow. Looking ahead to 2025, Alcon provided a revenue guidance range of $10.2 billion to $10.4 billion, implying a 6% to 8% growth rate in constant currency, and they expect core diluted earnings per share to be between $3.15 and $3.25, representing an 8% to 11% growth. The company anticipates a full-year core operating margin between 21% and 22%, with a core tax rate projected at approximately 20%. Furthermore, Alcon announced a proposed dividend increase to CHF0.28 per share and a share repurchase program of up to $750 million to offset future dilution. The company highlighted their commitment to innovation with upcoming product launches, including UNITY VCS, a phaco and vit device, and PanOptix Pro, a PCIOL innovation.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.