Don't Miss These Facts About Alcon

Now trading at a price of $73.84, Alcon has moved -2.5% so far today on a volume of 783,203, compared to its average of 935,075. In contrast, the S&P 500 index moved -0.2%. Read below for a basic value analysis of Alcon.

Alcon shares moved 2.0% over the last 52 weeks, with a high of $81.97 and a low of $55.21. During this time, the stock outperformed the S&P 500 index by 9.7%. As of January 2022, the company's 50-day average price is $69.0. Alcon Inc., an eye care company, researches, develops, manufactures, distributes, and sells eye care products for eye care professionals and their patients worldwide. The large-cap Healthcare company has 24,000 full time employees and is based in Geneva, Switzerland. Alcon has returned a 0.3% dividend yield over the last 12 months.

Exceptional EPS Growth with Healthy Leverage Levels:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $7,508 $6,833 $8,291
Revenue Growth n/a -8.99% 21.34%
Gross Margins 48.8% 43.0% 56.1%
Gross Margins Growth n/a -11.89% 30.47%
Operating Margins -2.5% -7.0% 7.0%
Operating Margins Growth n/a -180.0% 200.0%
Earnings Per Share -$1.34 -$1.09 $0.76
EPS Growth n/a 18.66% 169.72%
Free Cash Flow (MM) $244 $256 $165
FCF Growth n/a 4.92% -35.55%
Capital Expenditures (MM) -$676 -$567 -$1,180
Net Debt / EBITDA 2.2 2.31 1.44

Alcon Is Overvalued:

Compared to the Healthcare sector's average of 13.21, Alcon has a trailing twelve month P/E ratio of 63.7 and, according to its EPS guidance of 2.51, an expected P/E ratio of 29.4. Alcon's PEG ratio is 0.46 based on its 139.67% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Alcon's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 4.88, which suggests that the company's shares are actually overvalued.

However, Alcon is likely undervalued in terms of its equity because its P/B ratio is 1.8 compared to its sector average of 4.07. The company's shares are now trading 182.5% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * EPS * book value per share) = √(22.5 * 0.76 * 39.957) = $26.14

Alcon Is the Subject of Mixed Market Indicators:

12 analysts are following Alcon and have set target prices ranging from $76 to $96 per share. On average, they have given the company a rating of buy. At the current price of $73.84, ALC is trading -11.65% away from its average analyst target price of $83.58 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.