Sharechat Logo

Cochlear

Wednesday 14th September 2011

Text too small?

Cochlear's (ASX: COH) voluntary recall of its Nucleus CI500 range of implants has caused several brokers to dramatically review their ratings on the shares.

On Monday 12 September 2011 COH announced it was undertaking a voluntary recall of its unimplanted Nucleus CI500 range after a recent increase in failures in its Nucleus CI512 implants. "In an abundance of caution, Cochlear has issued a voluntary recall of the Nucleus CI500 range of cochlear implants while it further investigates the cause of this issue," the company said in a statement.

Cochlear is the global leader in implantable devices for the hearing impaired and is a world-leading manufacturer and marketer of cochlear hearing implants with a reported global market share of around 70%. COH’s solutions for hearing loss include cochlear implants, bone conduction implants, implants for electro-acoustic stimulation, auditory brain stem implants and implants for direct acoustic stimulation.

Broker recommendations are as follows:
Goldman Sachs cuts to sell from hold.
Merrill Lynch adjusts to underperform from neutral.
Credit Suisse has cut its target to A$63 from A$70, but keeps its neutral rating.
UBS cuts to sell from neutral.
Nomura cuts to neutral from buy.
Citigroup cuts its target to A$43.90 from A$62.08.

Dan Stratful broker at Investment Research Group (IRG) says that “Cochlear has traditionally traded at a premium on the market due to its dominant global market share of around 65-70%. That premium is now being put in question after a recall which could reportedly threaten its market share.”

COH reported that revenue for the year ending 30 June 2011 (FY11) rose by 10% to $809.6 million beating analyst expectations of $782.2 million. Sales, excluding FX contracts, were $732.2 million, up 5% in reported terms, however in constant currency sales were up 17%. Net profit for the year was a record $180.1 million, up from $155.2 million last year and slightly above the average of seven analysts' expectations of $177.5 million.

The FY11 result was achieved in difficult global financial conditions and highlighted the multiple growth drivers the business delivers across products and geographical spread. With 95% of the company's sales outside of Australia, COH is highly exposed to the fortunes of the AUD, which the company manages through a non-speculative currency hedge program which protects it from currency volatility.

 

Contact IRG on 0800 437 8489
Dan Stratful
Authorised Financial Adviser (AFA)
dan.stratful@irg.co.nz

**A disclosure statement is available, on request and free of charge by calling 0800 437 8489.

Recommendation sourced from the IRESS software trading platform

 

Disclaimer:
In accordance with the Financial Advisers Act 2008 (“the Act”) Sharechat is “Class Advice” and any advice or recommendations contained on this webpage is not “Personalised Advice” as defined by the Act. This means Sharechat does not take into account an investor’s particular financial position, financial needs, financial goals or risk profile. Investor’s who require “Personalised Advice” should contact an Authorised Financial Adviser (AFA).

 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

New Zealand Rural Land Company Limited (NZX: NZL) Agreement to acquire large scale dairy asset portfolio
EROAD Limited (NZX: ERD) launches Clarity Solo Dashcam
22nd October 2021 Morning Report
Pictor ready to roll out game-changing COVID antibody test in New Zealand
Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report
Greenfern Industries Limited (NZX: GFI) L&Q Notice
TruScreen Group Limited (NZX: TRU) Clinical Trial Results Highlight Efficacy of TRU Technology
20th October 2021 Morning Report
Freightways Limited (NZX: FRE) Acquisition of ProducePronto