Pgiam/iStock via Getty Images The Cooper Companies ( NASDAQ: COO ) traded higher on Tuesday after Jefferies upgraded the contact lens maker to Buy from Hold and raised its price target to $115 from $107 per share, noting a valuation discrepancy that it says is unjustifiable. The firm notes that The Cooper Companies' ( COO ) PE multiple indicates a significant but unjustified divergence with that of its rival Alcon ( ALC ), even as the former remains "best positioned" to take share in the contact lens market. The analysts attributed this to market dynamics, such as the daily shift to silicone hydrogel (SiHy) contact lenses, the company's leadership in the myopia (nearsightedness) market, and a supply ramp expected next year.
To back its conclusions, Jefferies cited a twofold rise in the company's capex expenditure over the past two years, a consumer survey, and other reasons. According to the latest data, The Cooper Companies ( COO ) trades at a forward non-GAAP P/E multiple of ~24.8x compared to Alcon's ( ALC ) non-GAAP forward P/E of ~29.
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