Contact Lens Maker Alcon's Has New Growth Avenues, Analyst Upgrades Stock

Oppenheimer has upgraded Alcon Inc ALC following firm first-quarter earnings and several new drivers coming into view.

The analyst sees a new opportunity in glaucoma with the announced acquisition of BELKIN Vision for $60 million immediately and up to $335 million with milestone payments.

Via the BELKIN Vision deal, Alcon adds FDA-approved Eagle direct-SLT for glaucoma. Selective Laser Trabeculoplasty (SLT) stimulates the trabecular meshwork to increase fluid drainage/lower Intraocular pressure (IOP). 

The analyst also writes that Eagle has differentiating characteristics including shorter treatment time. Once closed, BELKIN will broaden ALC’s reach into glaucoma treatment. 

The analyst also highlights:

• The approval of two enhancements to PanOptix IOL, with one likely launching in a year or more.
• Significant new capital upgrade cycle opportunity beginning later this year in Surgical.
• Market share opportunity in AT-IOLs in China following a VBP win. 

Oppenheimer has upgraded Alcon shares from Perform to Outperform, with a price target of $103.

Monday, Alcon reported first-quarter adjusted EPS of $0.78, beating the consensus of $0.73.

Sales increased $2.44 billion, almost in line with the consensus of $2.46 billion, up 5%, or 7% constant currency.

Oppenheimer writes that contact Lenses (11% cc) were the lead driver of the first quarter beat as Alcon continues to benefit from an increased presence in premium (toric/multifocal) lenses, and price increases were a driver.

Price Action: ALC shares are up 0.87% at $89.70 at the last check on Wednesday.

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