Cochlear shares rally after UBS upgrade
Make us a preferred source
Make us a preferred source on Google
The news: Cochlear shares have mounted a recovery after Friday's slump, boosted by an upgrade from UBS.
The numbers: The hearing implant maker's shares were up 2.9% to $270.21 at 1pm AEDT.
They closed 13.4% lower in the previous session after the company cut its expectation for full-year profit due to lower services revenue.
UBS upgraded its rating on the stock from 'sell' to 'neutral' and lifted its price target from $270 to $285.
The context: UBS analysts were optimistic on Cochlear's outlook, noting that first-half implant unit growth of 6%, along with expectations of 10% growth for FY25, imply an uplift into the second half. Importantly, they said, the company sees this as a sustainable forward run rate.
UBS raised its mid-term implant sales growth forecast from mid-single digits to high-single digits.
The analysts also downplayed the risk of potential competition from biotech rival Moderna as it trials a potential vaccine against cytomegalovirus, which can cause hearing loss in newborn babies.
They noted that Moderna has not seen the best case scenario efficacy-wise during its trials phase, while the appointment of vocal vaccine sceptic Robert F Kennedy Junior as the new US Health Secretary poses a risk to the vaccine developer.
The source: UBS research
