What Happened?
Shares of medical device company CooperCompanies (NASDAQ: COO) fell 3.2% in the afternoon session after Rothschild & Co Redburn lowered its price target on the stock to $92 from $95.
Despite the price target reduction, the analyst firm maintained its "Buy" rating on the shares. This type of action suggests that while the firm still views the stock favorably for the long term, its near-term expectations for the stock's price performance have been slightly reduced. Price target cuts, even without a formal ratings downgrade, can be interpreted negatively by the market, prompting some investors to sell and leading to a decline in the stock's price.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy CooperCompanies? Access our full analysis report here, it’s free.
What Is The Market Telling Us
CooperCompanies’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 12.4% on the news that the company reported mixed second-quarter 2025 results, with its forecast for the upcoming quarter falling short of Wall Street's expectations.
For the second quarter, the company's revenue of $1.06 billion met analyst estimates, and its adjusted earnings per share of $1.10 beat consensus by 3%. CooperCompanies also slightly raised its adjusted earnings guidance for the full year. However, investors appeared to focus on the weaker aspects of the report. The company's revenue guidance for the third quarter came in 2.8% below projections. Additionally, organic revenue grew by only 2% year on year, missing expectations, while operating margins contracted compared to the same period last year. The soft outlook and signs of slowing core growth overshadowed the earnings beat, prompting a significant sell-off in the stock.
CooperCompanies is down 27.9% since the beginning of the year, and at $65.32 per share, it is trading 41.3% below its 52-week high of $111.23 from September 2024. Investors who bought $1,000 worth of CooperCompanies’s shares 5 years ago would now be looking at an investment worth $823.74.
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