Alcon (SWX:ALC): Reassessing Valuation After Recent Share Price Stabilisation

Alcon (SWX:ALC) has quietly outperformed the broader healthcare space over the past month, with shares climbing about 4% even as the stock remains down sharply year to date.

See our latest analysis for Alcon.

That recent 30 day share price return of 3.84% looks more like a stabilisation than a full reversal. The year to date share price is still down 16.42%, and the one year total shareholder return is negative but modestly positive over three years.

If Alcon’s move has you reassessing the space, this could be a good moment to explore other healthcare stocks that are starting to show improving momentum of their own.

With earnings still growing, the share price well below analyst targets, and a sizeable implied intrinsic discount, the key question now is simple: is Alcon genuinely undervalued, or are markets already pricing in the next leg of growth?

Most Popular Narrative: 20% Undervalued

With Alcon last closing at CHF63.84 against a narrative fair value near CHF79.76, the story leans toward upside, hinging on efficiency led earnings growth.

Long term margin and earnings growth are further supported by operational leverage as recent innovation and portfolio additions ramp up (expected improvement of 150 to 200bps per year in operating margin outside of near term tariff/R&D pressure), as well as ongoing efforts to offset headwinds (tariffs, competitive pricing) through scale efficiencies and cost actions.

Read the complete narrative.

Curious how steady top line growth, expanding margins and a rich future earnings multiple can still add up to apparent value. The narrative’s math might surprise you.

Result: Fair Value of $79.76 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent competitive pressure in intraocular lenses and slower cataract procedure growth could easily cap both margin expansion and the valuation re rating story.

Find out about the key risks to this Alcon narrative.

Another View: Market Versus Peers

On simple earnings multiples, the story looks very different. Alcon trades on about 37.8 times earnings, far richer than both the European medical equipment average of 24.8 times and a 24.6 times peer average. It is only just below a fair ratio of 38.2 times, raising the question of how much upside is really left if growth disappoints.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Alcon Narrative

If you see the story differently or simply want to dig into the numbers yourself, you can build a custom view in minutes: Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Alcon.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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