CooperCompanies Earnings: Solid Result From Wins Across Portfolio and Margin Expansion

Narrow-moat CooperCompanies reported solid third-quarter results that came in slightly ahead of our expectations. Total sales of $1.0 billion were up 7.9% year over year thanks to a broad-based growth across the firm. CooperVision was up 7.3% despite lapping last year’s double-digit growth, and we attribute this to growing demand and solid execution. Capacity constraints continue to ease but demand still looks to be outpacing supply, especially within the MyDay portfolio, and we think resolving this will be a multiquarter workout. CooperSurgical, up 9.1%, continues to impress us with its ability to consistently deliver solid numbers. Against the backdrop of strong performance, Cooper raised its sales guidance about 2% at midpoint driven by an improved outlook in both business units. After updating our model and accounting for time value of money, we raise our fair value estimate to $90 per share from $88.