COH – UBS rates the stock as Sell

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First half results were above UBS’ forecasts. The broker upgrades FY15 estimates to match the first half performance.

That said, UBS expects processor upgrades to peak this year and revert to a lower replacement run rate over FY16. Hence, Cochlear risks an earnings hole unless there is a recovery in underlying implant sales.

UBS finds it cannot recommend the stock at current prices and retains a Sell rating. Target is raised to $63.00 from $57.90.

Sector: Health Care Equipment & Services.

Target price is $63.00.Current Price is $86.76. Difference: ($23.76) – (brackets indicate current price is over target). If COH meets the UBS target it will return approximately -38% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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