Merrill Lynch initiated coverage of Alcon (ACL) with a near and long-term strong buy rating.
Analyst Steven Tighe says Alcon is the largest ophthalmic-specific company, a leader in the global eye care market with a 25% share in 2001. He says it is well managed and positioned to generate significant growth. Tighe sees annual top-line growth of 9%, EPS growth in the high-teens to low twenties in the next few years. He cites steady growth of existing products, strong growth of new products, leverage of global infrastructure, strong cash flow and deleveraging and tax rate improvements.
Tighe has a $40 12-month target on the stock, which assumes shares could trade at 25 times his $1.61 2003 EPS estimate.