Citi analysts express their concern that Cochlear might be legally ordered to pay a considerable amount in its patent dispute with the Al Mann Foundation (AMF) while trading on a lofty PE multiple.
The analysts note the company has taken a provision of US$20m but this could prove insufficient with Citi estimating the final damages award can be as high as US$500m. Neutral. Target $127.50.
Sector: Health Care Equipment & Services.
Target price is $127.50.Current Price is $135.26. Difference: ($7.76) – (brackets indicate current price is over target). If COH meets the Citi target it will return approximately -6% (excluding dividends, fees and charges – negative figures indicate an expected loss).