Alcon (ALC) AI Stock Analysis

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Alcon

(NYSE:ALC)

Rating:73Outperform

Price Target:

CHF82.00

▲(11.59%Upside)

Alcon's strong financial performance is the primary driver of its overall score, supported by robust cash flow and low leverage. However, technical indicators show downward momentum, and valuation metrics suggest the stock is expensive. The recent earnings call provides a balanced view with upcoming growth potential from new products and acquisitions, offset by existing market challenges.

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 Launch

The product launch cycle is expected to fuel appealing exit rates for 2026, enhancing growth prospects.

Unity DX Launch

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

Core EBIT Margin

Core EBIT margin outlook is reduced from 21-22% to 20-21%, suggesting a -3% cut to consensus.

Market Competition

Alcon faces intense competition in the intraocular lenses market, potentially leading to share loss.

Sales Performance

The company's sales in both the Surgical and Vision Care segments were below analyst estimates.

Alcon (ALC) vs. iShares MSCI Switzerland ETF (EWL)

Market Cap

$36.49B

Dividend Yield0.38%

Average Volume (3M)983.82K

Price to Earnings (P/E)36.4

Beta (1Y)0.95

Revenue Growth3.90%

EPS Growth6.76%

CountryCH

Employees25,599

SectorHealthcare

Sector Strength44

IndustryMedical - Instruments & Supplies

Share Statistics

EPS (TTM)0.61

Shares Outstanding499,700,000

10 Day Avg. Volume839,373

30 Day Avg. Volume983,824

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 Cap1.03

Enterprise Value/Revenue1.12

Enterprise Value/Gross Profit13.66

Enterprise Value/Ebitda4.86

Forecast

1Y Price Target

$89.13

Price Target Upside21.29% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering16

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: -7.22%|

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

Very Positive

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.

Balance Sheet

Very Positive

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.

Cash Flow

Very Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
	EBIT
1.04B	1.41B	1.04B	672.00M	580.00M	-511.00M
	EBITDA
2.11B	2.68B	2.24B	1.72B	1.76B	1.11B
	Net Income Common Stockholders
974.00M	1.02B	974.00M	335.00M	376.00M	-531.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.10B	1.83B	1.10B	980.00M	1.58B	1.56B
	Total Assets
29.61B	30.35B	29.61B	29.21B	28.00B	27.60B
	Total Debt
5.13B	5.14B	5.13B	5.07B	4.48B	4.50B
	Net Debt
4.04B	3.31B	4.04B	4.09B	2.90B	2.94B
	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

Technical Analysis Sentiment

Negative

Last Price73.48

Price Trends

50DMA

75.50

Negative

100DMA

78.17

Negative

200DMA

78.78

Negative

Market Momentum

MACD

-1.21

Negative

RSI

49.83

Neutral

STOCH

89.03

Negative

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 73.48 is above the 20-day moving average (MA) of 72.52, below the 50-day MA of 75.50, and below the 200-day MA of 78.78, indicating a neutral trend. The MACD of -1.21 indicates Negative momentum. The RSI at 49.83 is Neutral, neither overbought nor oversold. The STOCH value of 89.03 is Negative, 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 (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOVN	81 Outperform	CHF185.70B	17.09		3.59%	6.34%	-13.16%
STMN	78 Outperform	CHF17.58B	45.46		0.86%	3.82%	57.08%
ROG	75 Outperform	$217.91B	25.98	26.76%	3.35%	3.03%	-27.86%
ALC	73 Outperform	$36.49B	36.37	5.23%	0.38%	3.90%	6.76%
LONN	64 Neutral	CHF40.55B	64.53		1.04%	-2.13%	2.50%
Sector *	54 Neutral	$5.38B	3.40	-45.06%	3.28%	16.75%	-0.02%

* Healthcare Sector Average

Performance Comparison

CH:ALC

Alcon

73.48

-7.93

-9.75%

CH:NOVN

Novartis AG

97.00

6.00

6.59%

CH:LONN

Lonza Group Ltd

577.00

99.24

20.77%

CH:STMN

Straumann Holding AG

110.50

-0.68

-0.61%

CH:ROG

Roche Holding AG

269.90

31.97

13.44%

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.