COH -7.3%: FY24 NPAT of $387mn was a relatively small miss compared to consensus at $399mn, but it caught an optimistic market wrong-footed and sent the hearing implant stock spiralling lower—investors are used to COH beating, not missing.
- FY24 NPAT of $387mn was up +19% but a 3% miss compared to consensus at $399mn.
- Underlying profit rose 27 per cent to $387 million, which was at the low end of the company’s guidance and fell short of analysts’ consensus of $400 million.
- Aggregate revenue was in line at $2.2B, up 15% on the previous corresponding period.
- Cochlear declared a final dividend of $2.10 per share, up 20%, taking its FY payout to $4.10.
- COH is targeting sales revenue growth of 10 per cent for the year ahead and a net profit margin of 18 per cent.
This result is likely to be followed by some minor downgrades, which could send the “well-owned” stock down towards $275, an area where MM likes the risk/reward. Bullish sentiment was fuelled by February’s +8% guidance upgrade to a range of $385-400M. The blaming game followed the result, with Cochlear chief executive Dig Howitt saying the market got ahead of itself in positioning for a higher 2023-24 result than the company delivered, and the hearing implant giant’s forecast for 10 per cent annual revenue growth was sufficiently transparent. Mr Howitt also said he was confident new drugs under development to combat hereditary hearing problems were not a structural threat – no surprises there!
- Following yesterday’s fall, COH is trading -3% below its average 5-year valuation, so it’s not exciting yet.
- COH is a quality business, but MM needs it ~10% lower before it will become attractive.
MM is neutral towards COH
Add To Hit List
