After decades of high growth, Citi believes the cochlear implant business is maturing and growth will now be more moderate. Accoustic implants offer the best potential to add growth in the long term and the broker observes, in this area, initial clinical results have been encouraging.
Citi considers the PE ratio of 27 times FY15 earnings forecasts is expensive and believes investors expecting the stock’s performance to revert to the historical trend will probably be disappointed. A Sell rating and $45.78 target are retained.
Sector: Health Care Equipment & Services.
Target price is $45.78.Current Price is $67.04. Difference: ($21.26) – (brackets indicate current price is over target). If COH meets the Citi target it will return approximately -46% (excluding dividends, fees and charges – negative figures indicate an expected loss).