The Cooper Companies, Inc. (COO) has a good track record when it comes to earnings surprises. Estimates are on the rise, giving it a Zacks #2 Rank (Buy), double-digit growth rates and solid valuations.
Shares are up nicely since being featured as a Zacks Rank Buy in February, but can that continue?
Company Description
The Cooper Companies is a global medical products maker focusing on specialty healthcare. The company operates through its subsidiaries, CooperVision and CooperSurgical.
Will History Repeat Itself
Cooper had beaten earnings expectations in each of the past 3 quarters and investors or waiting to see if they can extend that streak to 4 on Jun 2.
We have seen a couple upward revisions as we head into the number and the overall trend is quite bullish. The Zacks Consensus Estimate for fiscal 2011 is up 39 cents, to $3.92, in the past 90 days.
Next year’s average projection is up 42 cents, to $4.34, during that time. Given the $3.04 Cooper earned last year the growth rates are expected to be 29% and 11%, respectively.
Optimistic Outlook
On Mar 4 the company showed that profits jumped from $20.4 million, to $45.3. That broke down to $0.85 and beat expectations by 17 cents. More importantly Cooper raised guidance.
Earnings per share for the year should land between $3.70 and $3.90, raising both ends of the range by 40 cents.
And Solid Valuations
Shares of COO are trading at 19 times the forward estimate, but the fiscal year is more than half over so the 2012 outlook may be a better indicator, putting the P/E at 17 times.
The PEG ratio at 1.2 times, which is a decent price for the growth rate. Additionally, the price to book is just under 2.0.
Movement on the News
You can see below that shares took a nice jump on the earnings news. But even if it doesn’t spike, the rising estimates, earnings history and growth all point to a potential buy for the long run.
Read the February 18th Feature Here
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
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COOPER COS (COO): Free Stock Analysis Report
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