We maintain our Outperform rating on eye-care and surgical products maker The Cooper Companies (COO). The company’s fourth-quarter and fiscal 2010 revenues and earnings both beat the Zacks Consensus Estimates, boosted by healthy growth across the board.
Cooper proves to be a turnaround story based on rationalization of plants, successful product launches and better execution. Also, the industry outlook has improved with an expectation of lower drop-out rates and a higher proportion of sales of value-added lenses. Within the industry, Cooper remains a leader in toric lenses.
The company has strengthened its balance sheet by reducing debt with improved free cash flows. We currently have a target price of $69 per share.