Alcon (ALC) Q3 Earnings Growth Expected: Are You A Believer?

in EARNINGS/INVESTING IDEAS by

Alcon, Inc. (NYSE:ALC) is scheduled to report Q3 earnings results on November 20, 2019, at 4:30 p.m. Eastern time. The company is expected to report earnings of $0.46/share on revenue of $1.824 billion. The consensus earnings per share (EPS) of $0.46/share and revenue forecast of $1.824 billion is based on a poll of 12 analysts.

Alcon was formed from a spin-off by Novartis of its eye care business that announced in June 2018 and was finalized on April 9, 2019. Alcon researches, develops, manufactures, distributes, and sells a suite of eye care products within two principal businesses: Surgical and Vision Care. Since Alcon’s listing, the company has largely traded between the $54/share and $64/share price range:

ALC Stock Price

The Surgical business is focused on ophthalmic products for cataract surgery, vitreoretinal surgery, refractive laser surgery, and glaucoma surgery. The Vision Care business comprises daily disposable, reusable, and color-enhancing contact lenses and a comprehensive portfolio of ocular health products, including products for dry eye, contact lens care, and ocular allergies, as well as ocular vitamins and redness relievers. The company’s trailing twelve months revenue growth is charted below:

ALC Total RevenuesSource: Finbox

Earnings Call Trends

After the last earnings report for the period ending June 30, 2019, the stock price reacted by falling by -2.0%. The company missed the EPS target by $0.01/share.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-20 $61.75 $60.51 -2.0% Decline
2019-05-15 $59.86 $61.14 2.1% Increase

Fundamentals And Technical Analysis

Alcon is currently trading at $59.35/share, up 0.6% for the day. The company is trading at approximately 93.1% of its 52-week high of $63.73/share. The company’s stock price is down -3.9% since the last earnings report and up 0.5% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 59.30 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of -36.8x and a forward P/E multiple of 30.7x. Alcon’s current share price also implies a price-to-book (P/B) multiple of 1.5x. The following table summarizes some other key fundamental ratios:

Data as of November 19, 2019
Metric Value
Last Fiscal Period FY2019.Q2
Period End Date June 30, 2019
Stock Price (Current) $59.35
P/E Ratio -36.8x
P/E Ratio (Fwd) 30.7x
PEG Ratio 3.5
Total Debt to Capital (%) 11.7%
Levered Free Cash Flow $335 million
Enterprise Value / EBITDA 23.0x

Company Profile: Alcon, Inc.

Alcon, Inc. is a large-cap stock with a market capitalization of $28.57 billion and a total enterprise value of $31.596 billion. The company operates in the Healthcare sector and Healthcare Equipment & Supplies industry.

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