COO GM Prospects Bright

Analysts at JP Morgan maintain their "underweight" rating on The Cooper Companies Inc (NYSE: COO). The target price for COO has been raised from $19 to $34.

COO has posted robust results for F4Q, with higher-than-expected sales. The Cooper Companies’ adjusted EPS of $0.67 met the consensus and the estimates. COO has forecasted its adjusted EPS for 2010 at $2.45-$2.55, representing 7%-11% growth, and revenues at $1.100-$1.160 billion.

Considering that 60% of COO’s SG&A spending is overseas, currency may drive the company’s results in FY10, JP Morgan says. Gross margins are expected to be favorably impacted by currency rates from 1Q10. While COO’s GM guidance for 2010 is achievable, it is dependent on improved management of capacity and inventory, the analysts add.