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Alcon Inc (CH:ALC)
:ALC
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Alcon
(NYSE:ALC)
Rating:74Outperform
Price Target:
CHF79.00
▲(10.46% Upside)
Positive Factors
Acquisition
Alcon announces it plans to acquire Staar Surgical, which would complement Alcon’s existing refractive portfolio well, strengthening Alcon’s offering for individuals with more severe myopia.
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.
Growth Prospects
The product launch cycle is expected to fuel appealing exit rates for 2026, enhancing growth prospects.
Negative Factors
Geopolitical Risk
China exposure from Staar Surgical remains a risk, as two distributors in China represent approximately 51% of Staar Surgical’s revenue.
Market Competition
TRYPTYR will be entering a competitive market environment, facing established products like BLCO's Miebo and others, which could impact its adoption.
Sales Performance
Group sales were -2% below consensus in 1Q25 with a growth of +3% at constant currency, impacted by a soft US market and intense competitive pressure.
Alcon (ALC) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
$35.25B
Dividend Yield0.39%
Average Volume (3M)908.60K
Price to Earnings (P/E)35.1
Beta (1Y)0.93
Revenue Growth3.90%
EPS Growth6.76%
CountryCH
Employees25,599
SectorHealthcare
Sector Strength51
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)0.61
Shares Outstanding499,700,000
10 Day Avg. Volume1,005,955
30 Day Avg. Volume908,602
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue9.02
Enterprise Value/Gross Profit16.25
Enterprise Value/Ebitda40.59
Forecast
1Y Price Target
$86.02Price Target Upside20.27% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
Alcon Business Overview & Revenue Model
Company DescriptionAlcon Inc., an eye care company, researches, develops, manufactures, distributes, and sells eye care products for eye care professionals and their patients worldwide. The company's Surgical segment offers equipment, instrumentation and diagnostics, intraocular lenses (IOLs), and other implantables; and consumables, including viscoelastics, surgical solutions, incisional instruments, surgical custom packs, and other products for use in surgical procedures. Its cataract products include centurion vision system, LenSx femtosecond laser, LuxOR surgical ophthalmic microscope, NGENUITY 3D visualization system, and ORA system for intra-operative measurements; custom pak surgical procedure packs; vitreoretinal products comprising constellation vision systems, procedure packs, lasers and hand-held microsurgical instruments, and grieshaber and MIVS instruments, as well as scissors, forceps and micro-instruments, medical grade vitreous tamponades, and Hypervit vitrectomy probes; refractive surgery products, including WaveLight lasers and Contoura Vision used for LASIK treatment; EX-PRESS glaucoma filtration device; and implantables products, including AcrySof IQ IOLs products include monofocal IOLs and advanced technology IOLs under the PanOptix and ReSTOR brands for the correction of presbyopia and astigmatism at the time of cataract surgery. Its Vision Care segment provides daily disposable, reusable, and color-enhancing contact lenses; ocular health products, such as dry eye, glaucoma, contact lens care, and ocular allergies; and ocular vitamins and redness relievers under the TOTAL, PRECISION, DAILIES AquaComfort PLUS, Air Optix, Opti-Free, Clear Care, Tears Naturale, Genteal, ICAPS, and Vitalux brands. The company was formerly known as Alcon Universal S.A. and changed the name to Alcon Inc. in December 2001. Alcon Inc. was founded in 1945 and is headquartered in Geneva, Switzerland.
How the Company Makes MoneyAlcon generates revenue through its diverse product lines within the Surgical and Vision Care segments. The Surgical segment earns money primarily from the sale of surgical equipment, consumables, and intraocular lenses used in cataract and refractive surgeries. The Vision Care segment's revenue comes from the sale of daily, weekly, and monthly contact lenses, as well as lens care solutions. The company also benefits from partnerships with healthcare providers and hospitals, which often utilize Alcon's products in surgical procedures. Additionally, Alcon invests in research and development to introduce new products and technologies, thereby expanding its market share and enhancing its earnings potential.
Alcon Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: -9.70%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with strong highlights in product innovation and strategic acquisitions, which are expected to drive future growth. However, this is tempered by significant challenges including tariff impacts and softness in the U.S. surgical market. The overall sentiment is cautious optimism as the company navigates these challenges while leveraging its innovative product pipeline.Q1-2025 Updates
Positive Updates
Sales Growth and Market Expansion
Alcon delivered sales of $2.5 billion with an overall sales growth of 3%. The company also reported a core operating margin of 20.8% and core diluted earnings of $0.73 per share. Sales growth is expected to accelerate in the second half of the year driven by new product launches and market expansion.
Successful Product Launches and Innovations
The launch of Unity VCS in Japan and the U.S. and the anticipated market entry of PanOptix Pro and PRECISION7 are expected to drive significant growth. Unity VCS, a combined console for vitreoretinal and cataract surgery, has received regulatory approvals in key markets including CE mark, Australia, Japan, and the U.S.
Acquisition and Strategic Investments
Alcon acquired a majority interest in Aurion Biotech, a key player in regenerative medicine, and plans to launch AURN001 in Phase 3 trials by late 2025. The company also entered into a merger agreement to acquire LENSAR, enhancing its innovative equipment portfolio.
Positive Market Trends in Vision Care
Contact lens sales rose by 4% to $688 million, driven by product innovations like PRECISION1 and TOTAL30 families, as well as DAILIES TOTAL1 for astigmatism. The reusable lens segment, worth approximately $3.8 billion, also presents growth opportunities for Alcon.
Negative Updates
Tariff Pressures and Global Trade Environment
The current tariff structure is expected to pressure the cost of sales by approximately $80 million for the year. This represents a significant challenge as the company adapts to an evolving trade environment, particularly affecting its operations in China.
Soft U.S. Surgical Market
The U.S. surgical market showed softness, impacting implantable sales which were flat at $420 million. This is attributed to surgeon productivity issues and competitive pressures affecting market growth.
Challenges with Legacy Products
Declines in legacy contact lens products due to limited promotional efforts offset some of the growth from new product innovations. The transition from old to new products continues to be a drag on overall performance.
Lowered Revenue Growth Guidance
Alcon revised its revenue growth guidance to between 6% and 7% in constant currency, reflecting a soft U.S. market and the impact of foreign exchange rates.
Company Guidance
During Alcon's first quarter 2025 earnings call, the company provided updated guidance reflecting both market dynamics and strategic initiatives. Alcon reported sales of $2.5 billion, representing a 3% growth year-over-year, and a core operating margin of 20.8% with core diluted earnings of $0.73 per share. The company adjusted its full-year revenue guidance to $10.4 billion to $10.5 billion, anticipating a 6% to 7% sales growth in constant currency, driven by new product launches such as Unity VCS and PanOptix Pro. Despite tariff-related challenges expected to pressure costs by approximately $80 million, Alcon aims to offset these through operational actions and currency tailwinds. The company remains optimistic about the strength and resilience of its business, underpinned by its robust pipeline and strategic acquisitions, including Aurion Biotech, and continues to target a core diluted earnings range of $3.05 to $3.15 per share for the full year.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 | 4.97B | 9.91B | 9.46B | 8.72B | 8.29B | 6.83B |
| Gross Profit | 2.76B | 5.51B | 5.25B | 4.75B | 4.65B | 2.94B |
| EBITDA | 1.10B | 2.68B | 2.24B | 1.72B | 1.76B | 1.11B |
| Net Income | 573.00M | 1.02B | 974.00M | 335.00M | 376.00M | -531.00M |
Balance Sheet | ||||||
| Total Assets | 31.01B | 30.35B | 29.61B | 29.21B | 28.00B | 27.60B |
| Cash, Cash Equivalents and Short-Term Investments | 1.41B | 1.83B | 1.10B | 980.00M | 1.58B | 1.56B |
| Total Debt | 5.19B | 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 | 22.00B | 21.55B | 20.62B | 19.68B | 19.26B | 18.82B |
Cash Flow | ||||||
| Free Cash Flow | 794.00M | 1.41B | 537.00M | 472.00M | 165.00M | 256.00M |
| Operating Cash Flow | 914.00M | 2.08B | 1.39B | 1.22B | 1.34B | 823.00M |
| Investing Cash Flow | -711.00M | -1.17B | -1.09B | -1.86B | -1.20B | -572.00M |
| Financing Cash Flow | -267.00M | -322.00M | -211.00M | -8.00M | -123.00M | 466.00M |
Alcon Technical Analysis
Positive
71.52
Price Trends
70.48
Positive
73.23
Negative
75.98
Negative
Market Momentum
-0.18
Negative
55.28
Neutral
74.15
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 71.52 is above the 20-day moving average (MA) of 70.80, above the 50-day MA of 70.48, and below the 200-day MA of 75.98, indicating a neutral trend. The MACD of -0.18 indicates Negative momentum. The RSI at 55.28 is Neutral, neither overbought nor oversold. The STOCH value of 74.15 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 (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $35.25B | 35.13 | 5.23% | 0.39% | 3.90% | 6.76% | |
51 Neutral | $7.71B | -0.22 | -44.71% | 2.25% | 22.42% | -0.92% | |
| ― | $255.77B | 23.34 | 31.98% | 3.46% | ― | ― | |
81 Outperform | CHF189.35B | 16.64 | 3.49% | 9.36% | -14.82% | ||
71 Outperform | CHF31.36B | 95.53 | 0.11% | 6.22% | ― | ||
68 Neutral | CHF15.00B | 38.19 | 1.01% | 4.49% | 45.08% | ||
61 Neutral | CHF13.00B | 24.92 | 1.95% | 6.58% | -10.02% |
* Healthcare Sector Average
Performance Comparison
CH:ALC
Alcon
71.52
-10.89
-13.21%
RHHVF
Roche Holding AG
318.00
-0.09
-0.03%
CH:NOVN
Novartis AG
100.22
3.29
3.39%
CH:STMN
Straumann Holding AG
94.86
-29.88
-23.95%
CH:SOON
Sonova Holding AG
227.30
-59.32
-20.70%
CH:GALD
Galderma Group AG
133.70
53.62
66.96%
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.