COH – Macquarie rates as Underperform

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The broker came out of Cochlear’s investor day noting the market opportunity for the company is substantial, but it will require ongoing investment in order to increase utilisation. The product offering is attractive but the market is factoring in market share and industry growth rates well ahead of the broker’s base case.

With a forward PE of 40x and a forecast total shareholder return of -14% based on discounted cash flow valuation the broker retains Underperform. Target rises to $166 from $160.

Sector: Health Care Equipment & Services.

Target price is $166.00.Current Price is $195.57. Difference: ($29.57) – (brackets indicate current price is over target). If COH meets the Macquarie target it will return approximately -18% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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