ALC heads into the post-earnings stretch carrying a fresh bruise: Q1 revenue came in below consensus, operating profit fell sharply year-on-year, and the stock dropped around 10% on the news before clawing back a fraction.
The numbers behind the miss are stark. Q1 net income fell to $189 million from $350 million a year earlier. EPS dropped to $0.39 from $0.70. Revenue of $2.71 billion grew year-on-year but landed short of what the Street had pencilled in. The guidance raise offered some consolation — new product launches are gaining commercial traction — but the market's initial verdict was blunt. ALC ended the week down 2.1% to CHF 58.22, extending a 3.5% slide over the past month.
What's notable in the borrow market is how measured the response has been. Short interest in ALC is negligible — roughly 0.7% of the free float at most — and borrowing costs, while up around 33% over the past month, remain exceptionally low at under 1% annually. That move sounds dramatic in percentage terms but takes the cost-to-borrow from a whisker above 0.65% to just below 1%. Availability is ample. This is not a stock where short sellers are pressing an aggressive directional bet; the lending market reflects a largely uninhabited short side. The ORTEX short score of 29.9, drifting lower from 32.2 two weeks ago, tells the same story — pressure has eased rather than built.
The analyst response to the miss has been mixed but not punishing. BTIG kept its Buy rating while trimming the price target to $82, and Needham reiterated Buy with a $100 target — both actions taken today, the day of the earnings call. At CHF 58.22 against an $82 BTIG target, the implied upside is substantial. The forward EPS growth score ranks in the 79th percentile, reflecting the market's expectation that this year's profit decline is transitory rather than structural. Valuation has cheapened: the P/E ratio contracted nearly a full point over the past month to just under 20.7x, and the P/B ratio has moved down to 1.62x. Neither multiple is stretched. The EV/EBITDA of 13x looks reasonable for a medical device franchise with durable categories in surgical equipment and vision care.
The institutional base is broadly stable and diversified. Vanguard holds 4.4% and added shares in the most recent reported quarter. Norges Bank and Deutsche Asset Management both built positions. On the other side, ZKB and AKO Capital trimmed modestly. None of these moves are unusual for a large-cap Swiss-listed healthcare name — normal rotation among a 286-strong holder base. Insider activity has been limited and dated: the most recent trades on record were two sells by executives in late February at prices around CHF 67, well above where the stock trades today. That gap is worth noting — insiders who sold at 67 are sitting on a 13% decline since then.
Among peers, the week's relative performance was broadly weak across the medical device and healthcare space. GEHC fared worst, dropping 13.4% on the week. PHIA fell 3.7%. CLTN and SHL both held their declines under 2%. ALC's 2.1% weekly slide is roughly in line with the sector's softer mood, suggesting the revenue miss adds a company-specific overhang to an already cautious backdrop for the group.
The next scheduled catalyst is the Q2 2026 earnings call on August 11. Between now and then, the key question is whether the new launch products that management cited as gaining ground can translate into a revenue line that meets an already-reduced consensus — and whether a stock now trading 30% below where insiders sold can find a floor.
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