UPDATE: Societe Generale Downgrades Alcon Inc. (ALC:SW) (ALC) to Hold, 'immunity to macro headwinds lessens'

August 11, 2022 11:58 AM EDT
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    Up: 6 | Down: 5 | New: 17
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(Updated - August 11, 2022 11:59 AM EDT)

Societe Generale analyst Delphine Le Louet downgraded Alcon Inc. (ALC:SW) (NYSE: ALC) from Buy to Hold with a price target of CHF73.60 (from CHF88.60).

The analyst comments "ALC is gaining market share in the Surgical business, and we still believe that the combination of new manufacturing lines and a better business mix should lift its operating margin from 17% in 2018 to 22.3% in 2025e, despite macro headwinds and a likely negative FX effect in 2H22 and in 2023. For the post-1H22 period, we lower our growth forecasts for Vision Care and assume more inflationary pressure in our short-term margin scenario. We now forecast 2021-26 sales and EPS growth of respectively 5.8% and 12.5%, vs 6.9% and 14.1% previously. At our TP, ALC would trade at a c.27x 2023e P/E, a 13% discount to its 2y average 12m forward P/E, which we view as fair considering the likelihood that the second part of the year will be more complicated."

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