Buy This Ophthalmology Stock But Sell This One, Says Bernstein Analyst: 'Innovation Is Key'
Portfolio Pulse from Priya Nigam
Bernstein analyst Susannah Ludwig has initiated coverage on ophthalmology companies, recommending Alcon AG (NYSE:ALC) with an Outperform rating and a price target of $94.03, while giving Carl Zeiss Meditec AG (OTC:CZMWY) an Underperform rating with a price target of $82.31. Ludwig highlights the importance of innovation in the ophthalmology market, which is valued at $34 billion with mid-single digit growth rates. Alcon is noted for its significant R&D spending, which is 1.9 times higher than its next competitor, while Zeiss, though leading in digital, must maintain high R&D spending to stay competitive. Shares of Alcon and Carl Zeiss Meditec declined by 2.34% and 0.95%, respectively, at the time of publication.
January 23, 2024 | 5:47 pm
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NEGATIVE IMPACT
Carl Zeiss Meditec AG was given an Underperform rating by Bernstein with a price target of $82.31, due to challenges in maintaining R&D spending amidst increased competition.
The Underperform rating and lower price target reflect Bernstein's view that Carl Zeiss Meditec may struggle to keep up with R&D spending in a competitive market, which could lead to a decrease in investor confidence and a short-term decline in stock price.
CONFIDENCE 80
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Alcon AG received an Outperform rating from Bernstein with a price target of $94.03, indicating strong R&D spending and potential growth in the ophthalmology market.
The positive Outperform rating and high price target set by Bernstein suggest confidence in Alcon's market position and R&D capabilities, which could lead to increased investor interest and a potential rise in stock price in the short term.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90