Yahoo Finance Alcon (ALC) Faces Rising Expenses, Tough Competitive Scenario
Alcon ALC faces cost pressure amid a challenging macroeconomic environment. Also, a tough competitive landscape is a threat. The stock carries a Zacks Rank #4 (Sell).
Alcon is experiencing inflationary pressure in electronic components, freight, labor, resins and plastics, which impact the company’s margins. The company is also encountering supply chain challenges in certain components, including microchips, resins and plastics, metals and filters.
Further, 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 mix of competitors, ranging from large manufacturers to 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, which 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 Price
Alcon price | Alcon Quote
Further, in the United States, patient access to Alcon’s drug and device products that require a prescription or are included in provider service payments is determined in large part by the coverage and reimbursement policies of third-party health payors, including health insurers and government programs such as Medicare and Medicaid. Both government and commercial health insurers are increasingly focused on containing healthcare costs and have imposed or are considering additional measures that exert downward pressure on device and drug prices.
On a positive note, Alcon’s Surgical business continues to gain from the company’s 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 IOL implants 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.
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 of this, Alcon is at present outpacing market growth in every category where it has launched new products.
In contact lenses, Alcon is witnessing strong interest in its specialty lenses, including multifocal and toric. In recent quarters, the company witnessed a strong uptake of its specialty daily lenses, including DAILIES Total1 Toric, DAILIES Total1 Multifocal and Precision1 Toric. Clinical studies showcased at the recent American Academy of Optometry meeting showed that most contact lens dropouts who are refit into DAILIES Total1 could become successful contact lens wearers, and that comfort was improved in astigmatic patients who switched to DAILIES Total1 Toric.
Key Picks
Some better-ranked stocks in the broader medical space are Cardinal Health CAH, DaVita DVA and Insulet PODD. Cardinal Health and DaVita sport a Zacks Rank #1 (Strong Buy) each, while Insulet carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardinal Health’s stock has risen 13.3% in the past year. Earnings estimates for CAH have increased from $6.91 to $7.28 for fiscal 2024 and from $7.74 to $8.02 for fiscal 2025 in the past 30 days.
CAH’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 15.6%. In the last reported quarter, it delivered an earnings surprise of 16.7%.
Estimates for DaVita’s 2023 earnings per share have increased from $8.86 to $8.97 in the past 30 days. Shares of the company have risen 7.4% in the past year compared with the industry’s growth of 2.9%.
DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 35.6%. In the last reported quarter, it delivered an earnings surprise of 22.2%.
Estimates for Insulet’s 2023 earnings per share have increased from $2.54 to $2.56 in the past 30 days. Shares of the company have decreased 34.7% in the past year against the industry’s increase of 7.2%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 100.1%. In the last reported quarter, it delivered an earnings surprise of 108.9%.
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