Cooper Companies: Zacks’ Bear of the Day Play

Cooper Companies (COOResearch Report) recently beat the Zacks Consensus Estimate but is now a Zacks Rank #5 (Strong Sell) and is the Bear of the Day. Let’s take a look at why this is the case.

Description

The Cooper Companies, Inc., through its principal subsidiaries, develops, manufactures and markets healthcare products. CooperVision markets a range of contact lenses to correct visual defects, specializing in toric lenses that correct astigmatism. The company also markets conventional toric and spherical lenses and lenses for patients with more complex vision disorders. CooperSurgical markets diagnostic products, surgical instruments and accessories to the women’s healthcare market.

Recent Earnings

COO beat the Zacks Consensus Estimate of $2.24 by four cents in the most recent report. Revenue came in just a shade ahead of the Zacks Consensus Estimate at $519M compared to $505M.

The stock moved higher following the report, but guidance was lighter than expected and estimates have started to move lower.

Estimates

The Zacks Consensus Estimate has been falling over the last few months. The FY17 estimate stood at $9.74 in October and then fell to $9.69 in November and tumbled down to $9.19 in December. The estimate currently states at $9.19.

FY18 estimates also saw a sharp move lower, from $10.72 in November to $10.27 in December.

The decline in estimates is the main reason this is a Zacks Rank #5 (Strong Sell) and the Bear of the Day.

Chart

Zacks has developed a chart that helps investors see how earnings estimates have impacted the price of the stock over the last several years. We call this chart the price and consensus chart, and each color-coded lines represents analyst estimates over a designated year. As estimates increase, the stock tends to follow. The Zacks Rank is impacted by earnings estimate increases, beats and incorporates the idea of analyst agreement and magnitude. As a Zacks Rank #5 (Strong Sell) we see that estimates are moving higher.

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