Shares of ASX-listed medical equipment maker Cochlear Limited (AU:COH) rose over 4% today after the company gave an unexpected sneak peek into its Fiscal 2024 results, ahead of its official release scheduled on February 19. Cochlear witnessed solid momentum for its offerings across geographies and demographics, including children, adults, and seniors.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Cochlear, which specialises in hearing implant solutions, has operations across the Americas, Europe, and Asia Pacific. The implant units sold grew 14% in the first half of Fiscal 2024, with the company expecting the strong demand momentum to continue in the second half of the year.
COH shares have gained over 42% in the past year.
Cochlear’s Revised Outlook
Cochlear updated its full-year Fiscal 2024 underlying net profit outlook to be between AU$385 and AU$400 million, higher than its prior guidance of AU$355 to AU$375 million. The updated outlook represents a 26% to 31% growth over Fiscal 2023 and an 8% increase over the midpoint of its prior guidance range. This sudden surge is attributed to an estimated 10% to 15% growth in Cochlear implant units for FY24, marking an improvement from the prior outlook of a high-single-digit growth.
Cochlear said that sales for the first half of 2024 jumped by 25% year-over-year to AU$1.11 billion, higher than anticipated. Also, the underlying net profit for the first half stood at AU$192 million.
Is Cochlear a Good Buy?
Cochlear’s unexpected guidance upgrade came soon after an analyst downgrade that dragged down the shares by over 6% on February 6. UBS analyst Laura Sutcliffe downgraded COH shares to Sell from Hold and cut the price target to AU$240 (21.5% downside) from AU$260. Sutcliffe cited the possibility of diminishing sales for Cochlear implants if rival American drug maker Moderna (NASDAQ:MRNA) makes a vaccine against cytomegalovirus (CMV) infection, which accounts for nearly 20% of childhood deafness.
Overall, analysts have a Moderate Sell consensus rating on COH stock, backed by one Buy, one Hold, and four Sell ratings. On TipRanks, the Cochlear Limited share price forecast of AU$263.92 implies 13.6% downside potential from current levels. Having said that, analysts could revisit their rating on COH after today’s guidance update.
