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.
