Cochlear (COH)

Hi Anne,

Any advice provided through Market Matters will be of a general nature only, which means that it does not take into consideration any one’s personal circumstances, hence our answer will discuss how we see COH today.

We continue to believe COH is a quality company but as often happens when optimism and valuations get ahead of themselves if earnings miss expectations the share price reaction can be fairly aggressive, as was the case earlier this month for COH:

• FY24 NPAT of $387mn was a relatively small 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 expectations of $400 million.

On the earnings call, CEO Dig Howitt was very focused on the long-term opportunity in front of them, and we get that, however, share prices follow earnings, and more importantly, revisions in earnings, and consensus earnings for FY25 has been cut from ~$6.90 per share to $6.44 per share, which is about 7%.  The stock has fallen twice that, and we believe the “washout “of the weak longs is reaching maturity. We are looking at COH for our Active Growth Portfolio, targeting ~$280, only 5% below where the stocks been trading this week.

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Cochlear Ltd (COH)

LAST UPDATED 29/08/2024 13:37

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Cochlear Ltd (COH)

LAST UPDATED 29/08/2024 13:37