Alcon AG

Bernstein has named Sonova as its short-term top pick and Alcon as its preferred long-term idea in a new H2 playbook for European medtech, assigning both "outperform" ratings with price targets of CHF 275 and CHF 76.15, respectively. Sonova, the world's No. 1 player in the $7.7 billion hearing aid wholesale market with roughly a 25% unit share, is expected to benefit from a multi-pronged growth setup into its H1 2026/27E results in November, with Bernstein forecasting H1 wholesale organic growth of 10.1% versus consensus at 8% and Group organic growth of 6.5% versus consensus of 4.9%. The bull case rests on continued strength from the EON Sphere launch, further share gains at Costco, where the Infinio-based device only entered the channel in March 2026, and another seven months of tailwind from Virto R hearing aid sales, plus a sharp H2 improvement in the Cochlear Implant business and accelerating M&A contribution in Retail as rivals Demant and Amplifon remain financially constrained. Bernstein's core EBIT estimates sit 5-8% above consensus across 2026/27E-2028/29E. On Alcon, the dominant ophthalmology player holding #1 or #2 positions across most of its sub-markets, Bernstein argues investor sentiment on the intraocular lens and consumables businesses has become "overly negative" and that the pressure is "largely transitory," expecting implantables growth to accelerate to 4% in 2027. Bernstein's constant-currency revenue growth estimates run 38-112 bps above consensus for 2026E-2028E, with core EPS estimates 1-9% higher, and at roughly 17x NTM P/E it sees an attractive entry point into what it calls a "multi-year compounding business."

Alcon Inc. and RxSight, Inc. announced on July 6 a non-exclusive strategic collaboration to co-develop post-operatively adjustable pseudophakic intraocular lenses, pairing RxSight's light-adjustable technology with Alcon's global commercial footprint and surgical equipment portfolio. The partnership validates RxSight's technology while expanding Alcon's premium lens offerings. In Q1 2026, Alcon reported net sales of $2.7 billion, up 10% year-over-year, with core diluted earnings per share of $0.85 and a new $1.5 billion share repurchase program, while RxSight posted revenue of $30.9 million, down 18.5% year-over-year, and a net loss of $15.9 million, or $0.38 per share, while reiterating full-year revenue guidance of $120 million to $135 million. Alcon also opened its second training center in partnership with the Aravind Eye Care System in India on July 24. Hedge fund ownership of Alcon rose to 46 funds in Q1 2026 from 44 in Q4 2025, while RxSight remained at 33 funds.

Alcon Inc reported 7% sales growth in the second quarter of 2026, driven by broad-based strength across its surgical and vision care franchises. Unity VCS equipment sales surged 25% year-over-year with higher-than-expected average selling prices, while Panoptix Pro IOL adoption exceeded expectations, representing roughly 90% of Panoptix implants. Core operating margin expanded 160 basis points to 20.6%, and the company raised its full-year constant-currency EPS growth outlook to 12% to 15%. However, implantables growth remained subdued at 1%, with IOLs up only 2% amid competitive launches and flat US cataract procedure volumes. Alcon also discontinued its Power Vision IOL program due to performance issues and announced a collaboration with RxSight for next-generation adjustable lenses.

RxSight has withdrawn its full-year 2026 financial guidance as it pivots strategy following a 19% year-over-year drop in product sales and a new collaboration with Alcon. Second-quarter total revenue reached $33.7 million, including $6.5 million from the Alcon partnership, while product sales excluding that collaboration fell to $27.2 million. Light Adjustable Lens unit volumes declined 9% to 24,917, and gross margin excluding Alcon revenue slipped to 71.2% from 74.9% a year earlier. The company reported a net loss of $12.1 million, or $0.29 per share, and ended the quarter with approximately $209 million in cash and short-term investments, plus a $60 million upfront payment from Alcon received after the quarter closed. President and CEO Aziz Mottiwala said the guidance withdrawal allows a thorough business assessment without prior constraints, with formal guidance expected to resume in early 2027.

RxSight's modelled fair value has been lowered from $9.93 to $8.43 following softer second-quarter trends and a guidance cut. Jefferies reduced its price target from $7.50 to $6.50 with a Hold rating, while BofA cut its target from $8 to $6.50 and maintained an Underperform rating after preliminary Q2 sales of $27 million missed the $32 million Street expectation and 2026 guidance was reduced by $13 million at the midpoint. The revised valuation also reflects a shift in assumed revenue growth from 5.22% to 8.76%, a lower expected net profit margin from 12.79% to 11.76%, a future P/E multiple moving from 26.74x to 22.78x, and a discount rate easing from 7.85% to 7.45%. Analysts noted competitive trialing, macro pressures, and utilization at a four-year low, though BofA highlighted that the new Alcon collaboration could expand RxSight's reach into light adjustable PCIOLs over the longer term.

RxSight has revised its full-year 2026 revenue outlook to a range of $140 million to $160 million, which includes $30 million to $40 million from its newly announced strategic collaboration with Alcon. The company's standalone RxSight sales are now expected to be $110 million to $120 million, reflecting the continuation of headwinds experienced in the second quarter. Preliminary second-quarter total company revenue is approximately $32 million to $34 million, with $5 million to $7 million attributed to the Alcon agreement, while standalone sales of roughly $27 million fell 20% year-over-year. Management attributed the slowdown to widespread competitive trialing activity and pressured consumer sentiment, and it plans to accelerate U.S. sales force investments to reengage accounts. Full-year gross margin guidance was raised to 73% to 75% due to a favorable product mix, while operating expenses are still expected at the high end of $150 million to $160 million.

Alcon and RxSight have entered a non-exclusive collaboration to jointly develop adjustable presbyopia-correcting intraocular lenses. The partnership combines RxSight's post-operative light-adjustable technology with Alcon's PCIOL optical designs to create a co-developed technology that enables surgeons to fine-tune visual outcomes after cataract surgery. Under the agreement, RxSight will receive a $60 million upfront payment and could earn up to an additional $140 million in development and regulatory milestone payments. Alcon will lead global commercialization, while RxSight will handle development and manufacturing and receive royalties on net sales.