We’ve discussed hearing implant business COH a few times through 2024 as it continued to deliver for investors even after suffering a rare downgrade by UBS in February. The company delivered significant growth in cochlear implant unit sales and services revenue in the 1H report, with effective cost controls highlighted by lower-than-expected R&D expenses. We liked their decision to pause the share buyback due to high interest rates and recent share price appreciation, i.e. it demonstrated prudent capital use, although it does imply the stock is not “cheap”. Management anticipates FY24 underlying net profit of A$385-400M, supported by strong trading conditions and market share gains, a strong performance reflected by the share price.
- We are targeting a new high for COH, which implies 8-10% upside – the trend is your friend with this quality stock.
MM is bullish towards COH
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