Is it the Right Time to Hold Alcon Stock in Your Portfolio Now?

Alcon’s ALC Surgical business continues to gain from its diverse portfolio and incremental innovation. Within Vision Care, the company is registering solid growth, banking on strong sales of its contact lenses and ocular health products. Additionally, newer product introductions are poised to help it grow in the upcoming quarters. Meanwhile, adverse macroeconomic impacts and intense rivalry may hurt the company’s operations.In the past year, this Zacks Rank #3 (Hold) stock has rallied 3.3% against the industry’s 7.6% fall. The S&P 500 composite has risen 8.9% in the same time frame.The renowned pharmaceutical and medical device manufacturer has a market capitalization of $43.97 billion. ALC’s earnings surpassed estimates in three of the trailing four quarters and matched in one, delivering an average surprise of 5.9%.Let’s delve deeper.Upsides for ALCSurgical Business Expands: In terms of the latest developments within Implantables, Alcon’s technology continues to lead the market, with every three IOLs (advanced intraocular lenses) implanted globally being done with an Alcon lens. In premium lenses, the statistic is even more impressive, with one out of two ATIOLs being an Alcon product. The company’s flagship lenses, Vivity and PanOptix, continue to lead the category in the United States and worldwide. ALC is expanding in areas where it has significant opportunities to grow share, such as China. In the fourth quarter of 2024, the surgical segment saw 5% year-over-year revenue growth, led by strong international demand for IOLs, consumables and equipment despite the U.S. market softness and competitive pressures.Image Source: Zacks Investment ResearchNew Products Drive Growth: In Presbyopia-correcting Intraocular Lens (PCIOLs), Alcon currently leads the market with more than 60% of the global share and more than 80% share in the United States. In Surgical, the company maintained a strong market share in PCIOLs, solidifying its market-leading position driven by strong demand for products like PanOptix and Vivity despite new market entrants. The company currently sees meaningful share gains driven by its new toric product launches, including Precision1 and Dailies Total1.Alcon plans to launch the next-generation PanOptix soon. Alcon is on track for a full commercial launch of the UNITY VCS in May. Other innovations include the PanOptix Pro PCIOL (designed to minimize light scatter and improve patient outcomes) and the Voyager Direct Selective Laser Trabeculoplasty device.Vision Care Returns to Growth: In contact lenses, the company is successfully executing its strategy of investing in fast-growing market segments where it has significant share opportunities. As a result, Alcon is currently outpacing market growth in every category in which it has launched new products. Vision Care closed the fourth quarter with 7% year-over-year growth.A major highlight was the launch of PRECISION7, a weekly replacement lens targeting the $3.8 billion reusable lens market. Within the reusable lenses, its flagship, TOTAL30, continues to gain traction in markets around the world.Ocular Health continues to report strong performance with its portfolio of eye drops, including continued strength from the Systane family of artificial tears.Alcon’s HeadwindsMacroeconomic Pressure Stays: Alcon is experiencing inflationary pressures in electronic components, freight, labor, resins and plastics, impacting the company’s margins. ALC is also encountering supply-chain challenges in certain components, including microchips, resins and plastics, metals and filters. Going by the industry-wide trend, these inflationary pressures and supply-chain challenges are expected to continue into 2025.Tough Competitive Landscape: The ophthalmology industry is highly competitive, and in both surgical and vision care businesses, Alcon faces intense competition. The competitors range from large manufacturers with multiple business lines to small manufacturers that offer a limited selection of specialized products. Moreover, at times, pharmaceutical companies offer alternative medical therapies that can potentially disrupt core elements of their business.If Alcon is unable to keep up with the pace of innovation, its market position could be affected.ALC Stock Estimate TrendThe Zacks Consensus Estimate for Alcon’s 2025 earnings per share has fallen 2.1% to $3.23 in the past 30 days.The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $10.32 billion. This suggests a 4.9% rise from the year-ago reported number.Key PicksSome better-ranked stocks in the broader medical space are Veracyte VCYT, Resmed RMD and Boston Scientific BSX.Veracyte has an earnings yield of 3.2% against the industry’s -3.1% yield. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 515.9%. Its shares have risen 44.5% compared with the industry’s 3.6% growth in the past year.VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Resmed, carrying a Zacks Rank #2 (Buy) at present, has an estimated fiscal 2025 earnings growth rate of 22.7% compared with the industry’s 18.8%. Shares of the company have risen 17.3% compared with the industry’s 7.7% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.9%.Boston Scientific, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 13.3%. Shares of the company have surged 54.4% compared with the industry’s 9.7% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.3%.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report ResMed Inc. (RMD): Free Stock Analysis Report Alcon (ALC): Free Stock Analysis Report Veracyte, Inc. (VCYT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks