A Closer Look at Cooper Companies (COO) Valuation Following Jana Partners’ Push for Transformation

Cooper Companies (COO) is in the spotlight after activist investor Jana Partners announced plans to push for major changes. These plans include a possible merger of the company’s contact lens business with Bausch + Lomb.

See our latest analysis for Cooper Companies.

Cooper Companies’ share price has been under pressure lately, recently closing at $69.91 and posting a 7-day share price return of -4.9%, as investors digest news of potential restructuring and activist involvement. With a 1-year total shareholder return of -33.95%, recent momentum has clearly faded. The upcoming earnings and activist-driven changes may signal a new chapter ahead.

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With shares now trading at a notable discount to analyst targets despite recent margin gains, the big question is whether Cooper Companies is poised for a rebound or if the market already reflects its future growth prospects.

Most Popular Narrative: 15.8% Undervalued

With Cooper Companies’ fair value estimated at $83 per share and the last close at $69.91, the narrative signals a sizeable upside if assumptions hold. Let’s see what’s driving this optimism from the perspective of the consensus narrative.

Free cash flow is poised to inflect higher as a multi-year capital expenditure cycle winds down following the ramp-up of MyDAY capacity. Management is guiding for approximately $2 billion in free cash flow over the next three years. This improved cash generation, tied to strong cost discipline and revenue momentum, will further benefit shareholders via debt reduction and share repurchases.

Read the complete narrative.

Where do all these bullish math projections come from? The narrative’s core hinges on ambitious profit and margin expansion, relying on operational breakthroughs and a shrinking share count. What’s the real story behind these bold numbers? Dive in and see for yourself.

Result: Fair Value of $83.00 (UNDERVALUED)

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

However, persistent pricing pressure in Asia Pacific or delays in converting MyDAY fitting activity to sustained sales could compress margins and curb anticipated growth.

Find out about the key risks to this Cooper Companies narrative.

Another View: What Multiples Tell Us

Taking a look at Cooper Companies through the lens of its price-to-earnings multiple, the picture changes. Shares currently trade at 34.1 times earnings, which is noticeably higher than the peer average of 28.8 and above the fair ratio of 29.3. This gap suggests investors are paying a premium compared with both the industry and what the market might consider “fair” in the future. Does this higher pricing signal confidence, or is it a valuation risk?

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

Build Your Own Cooper Companies Narrative

If you’ve got your own angle on the data, or want to test your own thesis, it’s easy to build a personal narrative in just a few minutes. Do it your way: Do it your way

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

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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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