Baird Maintains Outperform on Alcon, PT Down to $95 from $108

Baird Maintains Outperform on Alcon, PT Down to $95 from $108

Alcon Inc. (NYSE: ALC) experienced a notable drop in its stock price following the company's announcement of a revised 2025 sales forecast and weak second-quarter earnings. The stock fell by 9.71% in premarket trading, with the 2025 full-year net sales forecast being lowered to $103-104 billion from $104-105 billion [1]. This adjustment was primarily attributed to the continued impact of U.S. tariffs and an estimated annual tariff loss of $1 billion. Additionally, second-quarter sales of $25.8 billion fell short of analysts' expectations of $26.3 billion, indicating a decline in demand. The company's net income also decreased year-over-year, from $2.23 billion to $1.76 billion, with earnings per share dropping from $0.45 to $0.35 [1].

Despite the setbacks, Alcon reported strong performance in the second quarter of 2025, with net sales of $2.6 billion, a 4% increase on a reported basis and 3% on a constant currency basis compared to the same period in 2024 [2]. The growth was driven by robust early demand for recent product launches such as Unity VCS, Voyager, PanOptix Pro, Precision7, Systane Pro PF, and Tryptyr. The company also announced the launch of Tryptyr, a first-in-class treatment for dry eye disease, in the US [2]. Furthermore, Alcon announced an agreement to acquire STAAR Surgical, expanding its presence in myopia correction and offering a full spectrum of treatments for this growing global health concern [2].

Baird Financial has maintained its "Outperform" rating on Alcon but revised its price target (PT) down to $95 from $108. The firm cited the company's strategic initiatives, including new product launches and acquisitions, as reasons for maintaining a positive outlook. Baird noted that Alcon's forward-looking statements indicate continued investment in R&D and strategic acquisitions to expand its product portfolio and market reach [3]. The firm acknowledged the challenges posed by tariffs and external factors but remains optimistic about Alcon's ability to maintain its growth trajectory.

References:
[1] https://www.ainvest.com/news/alcon-shares-fall-9-71-premarket-lowering-2025-sales-forecast-reporting-weak-q2-earnings-2508/
[2] https://www.ainvest.com/news/alcon-q2-2025-earnings-call-transcript-analysis-2508/
[3] https://www.ainvest.com/news/alcon-boosts-2025-revenue-outlook-104-billion-acquisitions-products-2508/