Alcon, Inc. engages in the development, manufacture, and marketing of market surgical equipment and devices, pharmaceutical eye drops, and consumer vision care products to treat eye diseases and disorders. It operates through the following segments: Surgical and Vision Care. The Surgical segment offers implantable products, consumables and equipment for use in surgical procedures to address cataracts, vitreoretinal conditions, refractive errors, and glaucoma. The Vision Care segment comprises daily disposable, reusable and color-enhancing contact lenses, as well as portfolio of ocular health products, including over-the-counter products for dry eye, contact lens care, and ocular allergies, as well as ocular vitamins and redness relievers. The company was founded by Mr. Robert Alexander and Mr. William Conner on 1945 and is headquartered in Fribourg, Switzerland.
ALC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Alcon Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Alcon Inc ranked in the 0th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Alcon Inc ended up being:
The company's compound free cash flow growth rate over the past 1.28 years comes in at -0.46%; that's greater than merely 2.7% of US stocks we're applying DCF forecasting to.
Alcon Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -1.94. This coverage rate is greater than that of just 18.1% of stocks we're observing for the purpose of forecasting via discounted cash flows.
As a business, Alcon Inc experienced a tax rate of about 309% over the past twelve months; relative to its sector (Healthcare), this tax rate is higher than 98.63% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
AGHC, AMRN, ATRS, MOR, and PACB can be thought of as valuation peers to ALC, in the sense that they are in the Healthcare sector and have a similar price forecast based on DCF valuation.
Alcon Inc. (ALC) Q2 2020 Results Conference Call August 19, 2020 08:00 AM ET Company Participants Karen King - SVP, Corporate Affairs David Endicott - CEO Tim Stonesifer - CFO Conference Call Participants Veronika Dubajova - Goldman Sachs Matt Miksic - Credit Suisse Jeff Johnson - Baird Steve Willoughby -...