COH surged higher in June ironically after headlines of “Cochlear cuts guidance”. The hearing company flagged an underlying net profit for the 12 months through June of $390-400mn, down by around 6% compared to its February numbers. However, the bulls won big on the day, anticipating market-share gains following the launch of COH’s new hearing implant system, shrugging off the short-term downgrade. If we see a strong adoption in the coming quarters for these new implants, it’s likely to propel COH back towards $350.
- We aren’t keen on COH’s risk/reward around $300 as it keeps rerating in both directions on news. The key moving forward is the take-up of its new implants, which we will monitor.
MM is neutral towards COH around $300
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