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Alcon's (ALC) Market Share Gains, New Launches Aid Growth

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Alcon (ALC - Free Report) has been gaining from a strong pipeline and its focus on research and innovation. Market share gains also aid growth. The stock currently carries a Zacks Rank #2 (Buy).

In Presbyopia-correcting Intraocular Lens (PCIOLs), Alcon currently leads the market with more than 60% share globally and over 80% share in the United States. In Surgical, the company maintains a strong market share in PCIOLs, driven by strong demand for products like PanOptix and Vivity despite new market entrants. Vivity's non-diffractive properties, ease of use and consistency of surgical outcomes make it particularly appealing.

Within Surgical, Alcon commercially launched SMARTCataract in the United States. This is expected to broaden the scope of the company in the growing surgical ophthalmology space. The company currently sees meaningful share gains driven by its new toric product launches, including Precision1, Total30 and Dailies Total1.

The company will offer a cataract-only system called UNITY CS, which will be available in 2026. Importantly, UNITY brings with it new and innovative consumables that drive incremental benefits for the surgeon. The launch of these instruments will help the company secure the next decade of the company’s consumables business, which is a large, recurring and profitable revenue stream.

In ocular health, the company is also expanding business with the integration of Rocklatan and Rhopressa and concluded Phase 3 trials for AR-15512, the dry-eye pharmaceutical candidate. In addition, the company is witnessing growth in its over-the-counter portfolio, mainly driven by favorable pricing and a sustained family of products. The company looks forward to the growing demand for its multi-dose preservative-free formulations, which are helping expand the U.S. preservative-free category.

Alcon’s Surgical business continues to gain from a diverse portfolio and incremental innovation. In terms of the latest developments within Implantables, Alcon’s technology continues to lead the market. Globally, one out of every three IOLs implanted is done with an Alcon lens. In premium lenses, the statistic is even more impressive, with one out of two ATIOLs being an Alcon product. The company’s flagship lenses, Vivity and PanOptix, continue to lead the category in the United States and around the world. Additionally, it continues to expand in areas where it has significant opportunities to grow share, such as China.

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Alcon Price

Alcon price | Alcon Quote

Within the Surgical franchise, revenues were up 6% year over year in the first quarter, mainly driven by advanced technology intraocular lenses, including Vivity, PanOptix and monofocal torics in international markets.

Within Vision Care, Alcon is registering solid growth, banking on strong sales of its contact lenses and ocular health products. In contact lenses, the company is successfully executing its strategy of investing in fast-growing market segments where it has significant share opportunities. As a result, Alcon is outpacing market growth in every category where it has launched new products.

In contact lenses, Alcon with its strategic investments, has secured its position as one of the fastest-growing companies. It is witnessing strong interest in its specialty lenses, including multifocal and toric.

On the flip side, Alcon is experiencing inflationary pressure in electronic components, freight, labor, resins and plastics, impacting the company’s margins. The company is also encountering supply chain challenges in certain components, including microchips, resins and plastics, metals and filters. The company expects these inflationary pressures and supply chain challenges to continue in 2024. The cost of net sales in the first quarter was up 2.9% year over year. Our model estimates a 5.4% increase in the metric for full-year 2024.

Meanwhile, the ophthalmology industry is highly competitive. In the surgical business, Alcon competes with large manufacturers with multiple business lines as well as small manufacturers that offer a limited selection of specialized products. The company also faces competition from providers of alternative medical therapies, such as pharmaceutical companies that have  the potential to disrupt core elements of its business.

In vision care business, the market for contact lenses is intensely competitive and is characterized by declining sales volumes for older and reusable product lines and growing demand for daily lenses and advanced materials lenses. Increased product entries from contact lens manufacturers in Asia also pose a massive threat.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Masimo (MASI - Free Report) , Boston Scientific (BSX - Free Report) and Myriad Genetics (MYGN - Free Report) . While Masimo sports a Zacks Rank #1 (Strong Buy) at present, Boston Scientific and Myriad Genetics carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks Rank #1 stocks here.

Masimo shares have risen 10.8% in the past year. Estimates for the company’s earnings have increased from $3.63 to $3.83 for 2024 and from $3.97 to $4.20 for 2025 in the past 30 days.

MASI’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 14.6%. In the last reported quarter, it posted an earnings surprise of 11.7%.

Estimates for Boston Scientific’s 2024 earnings per share have moved up to $2.40 from $2.32 in the past 30 days. Shares of the company have rallied 56% in the past year compared with the industry’s rise of 11.1%.

BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%. In the last reported quarter, it delivered an earnings surprise of 6.9%.

Estimates for Myriad Genetics’ 2024 earnings have moved up to 5 cents from 3 cents per share in the past 30 days. Shares of the company have improved 59.3% in the past year against the industry’s 3.1% fall.

MYGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 213.4%. In the last reported quarter, it delivered an earnings surprise of a staggering 600%.

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