Alcon Earnings: Strong Demand and Product Mix Raise Top and Bottom Line; Shares Still Expensive

Narrow-moat Alcon reported second-quarter earnings that were ahead of our expectations. Total sales were up 9.2% year over year as strong performance from both surgical and visioncare units boosted the top line. Management raised guidance for full-year sales and diluted EPS on the backdrop of diminishing inflation and supply chain challenges, as well as healthy and resilient demand. After updating our near-term assumptions and adjusting for the time value of money, we raised our fair value estimate to $64 from $60.