Cooper Companies (COO): Survey Shows JNJ's Decision to Discontinue UPP is Viewed Negatively - Jefferies

Jefferies Cooper Companies (NYSE: COO) analyst, Anthony Petrone, conducted a follow-up survey of 34 optometrists to gauge sentiment around JNJ’s UPP shift and pending SiHY monthly launch. The key finding on UPP is that the majority of optometrists view JNJ’s decision to discontinue UPP negatively. The read-through on a potential SiHY monthly launch was neutral, with a portion of optometrists indicating shifts away from Biofinity pointing to an approximate 5% share loss which he views as manageable for the company.

Concurrent with his initial contact lens survey Johnson & Johnson announced its intentions to discontinue unilateral pricing policy (UPP). The bear thesis on this shift was that JNJ would heavily discount prices resulting in share shift away from COO and others. The Jefferies survey indicates the opposite: 65% of optometrists viewing JNJ’s shift negatively and 62% reporting no change to pricing. Several respondents indicated intentions to steer share away from JNJ toward other manufacturers.

The collective survey work points to three observations:

1) the redesign of Clarity 1-day has been well received and is driving prescription volumes

2) JNJ’s shift away from UPP has not been well received by optometrists

3) launch of a SiHY monthly from JNJ will lead to some share shift. However, any slippage appears manageable for the company.

The firm maintained a Buy rating and $175 price target.

For an analyst ratings summary and ratings history on Cooper Companies click here. For more ratings news on Cooper Companies click here.

Shares of Cooper Companies closed at $165.63 yesterday.

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