Here's Why You Should Invest in Cooper Companies (COO) Stock
The Cooper Companies, Inc. COO continues to benefit from solid prospects of core CooperVision (CVI) unit and robust CooperSurgical (CSI) portfolio.
Shares of this company have slumped 7.7% compared with the industry’s decline of 10.6% in a year’s time. Meanwhile the S&P 500 index fell13.4% over the same time frame.
Cooper Companies, with a market capitalization of $14.58-billion, is a specialty medical device company operating globally. Its earnings are expected to improve 11% over the next five years. Moreover, it has a trailing four-quarter positive earnings surprise of 2.2%, on average.
The stock also has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), are better picks than most.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2.
What’s Favoring the Stock?
Cooper Companies maintained its leading position in the markets of specialty lenses, supported by highly exclusive products of Biofinity and Clariti. In fact, the company’s flagship silicone hydrogel lenses are also expected to deliver strong sales in the coming quarters. The company’s MyDay lenses are already available in Europe and has gained significant traction within a short span of time. Clariti lenses also hold significant growth prospects.
For fiscal 2020, CVI revenues are anticipated between $2.07 billion and $2.10 billion, suggesting growth of 5.5-7% at constant currency (cc).
Cooper Companies is well positioned to gain from the expanding CSI product portfolio. In initiative bid to bolster its CSI portfolio, CooperSurgical acquired Incisive Surgical that sells unique absorbable skin staple — INSORB.
The company recently announced that it has signed an asset-purchase agreement to acquire the flagship contraception platform of Israel-based Teva Pharmaceutical Industries (TEVA) — PARAGARD Intrauterine Device. For fiscal 2020, the company expects mid-single digit growth from the PARAGARD acquisition.
For fiscal 2020, CSI revenues are estimated in the range of $697-$717 million, indicating growth of 3-6% at cc.
Estimates Trend
For fiscal 2020, the Zacks Consensus Estimate for revenues is pegged at $2.80 billion, indicating an improvement of 5.5% from the year-ago quarter. The same for earnings stands at $12.95, suggesting growth of 4.9% from the year-ago reported figure.
Other Stocks to Consider
Some other top-ranked stocks from the broader medical space include McKesson Corporation MCK, Merit Medical Systems, Inc. MMSI and Masimo Corporation MASI, each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
McKesson has an estimated long-term earnings growth rate of 6.1%.
Merit Medical has an estimated long-term earnings growth rate of 12.1%.
Masimo has a projected long-term earnings growth rate of 23.3%.
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