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Innovation Aids Alcon Stock's Growth Despite Macroeconomic Troubles
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Alcon Inc. (ALC - Free Report) benefits from strong market share gains. The company’s broad pipeline and focus on research and innovation are impressive. Yet, challenging international market with geopolitical pressure is a concern. The tough competitive landscape is also a threat.
Major Factors Driving ALC Stock
Within the Surgical business, of late, the company’s implantable sales are gaining traction in international markets, banking on advanced technology intraocular lenses that includes Vivity, PanOptix and monofocaltorics. In Consumables, sales continue to grow, driven by cataract and vitret consumables, particularly in international markets. Although equipment sales were down during the second quarter of 2024, the company still expects its growth to be largely in line with the last year until Alcon begins to roll out the new UNITY platform.
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. In daily lenses, the company continues to experience share gains driven by its product innovation, including the PRECISION1 family and the DAILIES TOTAL1 for astigmatism. The PRECISION1 family grew approximately 30% in the second quarter.
Within the reusable lenses, its flagship - TOTAL30 continues to gain traction in markets around the world. Alcon plans to expand the reusable portfolio with the launch of PRECISION7 in 2025. The company is working with a handful of eyecare professionals in the United States and has received positive feedback for PRECISION7.
The stock has gained 25.9% year to date compared with the industry’s 9.3% rise. With the company strategically growing through innovation and market expansion, we expect the stock to continue its upward movement in the coming days.
Major Concerns for Alcon Stock
Alcon is experiencing inflationary pressures in electronic components, freight, labor, resins and plastics, which is impacting the company’s margins as well. The company is encountering supply chain challenges in certain components, including microchips, resins and plastics, metals and filters. It expects these inflationary pressures and supply chain challenges to continue in 2024. The cost of net sales in the second quarter was up 5.9% year over year. Our model estimates a 5.7% increase in the metric for full-year 2024.
The ophthalmology industry is highly competitive, and in both surgical and vision care businesses, Alcon faces intense competition. In the surgical business, Alcon faces a mixture of competitors, ranging from large manufacturers with multiple business lines to 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 the vision care business, Alcon operates within a highly competitive environment. In contact lenses, increased product entries from contact lens manufacturers in Asia are posing a massive threat. 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.
Alcon's Zacks Rank and Key Picks
The stock currently carries a Zacks Rank #3 (Hold).
Boston Scientific’s shares have risen 54.7% in the past year. Estimates for the company’s earnings per share have remained constant at $2.40 in 2024 and $2.71 in 2025 in the past 30 days. BSX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 7.2%. In the last reported quarter, it posted an earnings surprise of 6.9%.
Estimates for AxoGen’s 2024 loss per share have remained constant at 1 cent in the past 30 days. Shares of the company have surged 182.1% in the past year compared with the industry’s growth of 18.8%. AXGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 96.5%. In the last reported quarter, it delivered an earnings surprise of 200%.
Estimates for Phibro Animal Health’s 2024 earnings per share have risen 0.7% in the past 30 days. Shares of the company have rallied 78.5% in the past year compared with the industry’s 19.1% growth. PAHC’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 4.1%. In the last reported quarter, it delivered an earnings surprise of 20.6%.
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Innovation Aids Alcon Stock's Growth Despite Macroeconomic Troubles
Alcon Inc. (ALC - Free Report) benefits from strong market share gains. The company’s broad pipeline and focus on research and innovation are impressive. Yet, challenging international market with geopolitical pressure is a concern. The tough competitive landscape is also a threat.
Major Factors Driving ALC Stock
Within the Surgical business, of late, the company’s implantable sales are gaining traction in international markets, banking on advanced technology intraocular lenses that includes Vivity, PanOptix and monofocaltorics. In Consumables, sales continue to grow, driven by cataract and vitret consumables, particularly in international markets. Although equipment sales were down during the second quarter of 2024, the company still expects its growth to be largely in line with the last year until Alcon begins to roll out the new UNITY platform.
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. In daily lenses, the company continues to experience share gains driven by its product innovation, including the PRECISION1 family and the DAILIES TOTAL1 for astigmatism. The PRECISION1 family grew approximately 30% in the second quarter.
Within the reusable lenses, its flagship - TOTAL30 continues to gain traction in markets around the world. Alcon plans to expand the reusable portfolio with the launch of PRECISION7 in 2025. The company is working with a handful of eyecare professionals in the United States and has received positive feedback for PRECISION7.
Alcon Price
Alcon price | Alcon Quote
The stock has gained 25.9% year to date compared with the industry’s 9.3% rise. With the company strategically growing through innovation and market expansion, we expect the stock to continue its upward movement in the coming days.
Major Concerns for Alcon Stock
Alcon is experiencing inflationary pressures in electronic components, freight, labor, resins and plastics, which is impacting the company’s margins as well. The company is encountering supply chain challenges in certain components, including microchips, resins and plastics, metals and filters. It expects these inflationary pressures and supply chain challenges to continue in 2024. The cost of net sales in the second quarter was up 5.9% year over year. Our model estimates a 5.7% increase in the metric for full-year 2024.
The ophthalmology industry is highly competitive, and in both surgical and vision care businesses, Alcon faces intense competition. In the surgical business, Alcon faces a mixture of competitors, ranging from large manufacturers with multiple business lines to 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 the vision care business, Alcon operates within a highly competitive environment. In contact lenses, increased product entries from contact lens manufacturers in Asia are posing a massive threat. 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.
Alcon's Zacks Rank and Key Picks
The stock currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Boston Scientific (BSX - Free Report) , AxoGen (AXGN - Free Report) and Phibro Animal Health (PAHC - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific’s shares have risen 54.7% in the past year. Estimates for the company’s earnings per share have remained constant at $2.40 in 2024 and $2.71 in 2025 in the past 30 days. BSX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 7.2%. In the last reported quarter, it posted an earnings surprise of 6.9%.
Estimates for AxoGen’s 2024 loss per share have remained constant at 1 cent in the past 30 days. Shares of the company have surged 182.1% in the past year compared with the industry’s growth of 18.8%. AXGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 96.5%. In the last reported quarter, it delivered an earnings surprise of 200%.
Estimates for Phibro Animal Health’s 2024 earnings per share have risen 0.7% in the past 30 days. Shares of the company have rallied 78.5% in the past year compared with the industry’s 19.1% growth. PAHC’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 4.1%. In the last reported quarter, it delivered an earnings surprise of 20.6%.