Alcon Earnings: Solid Results From Visioncare and International Offset Weak U.S. Performance

Narrow-moat Alcon's third-quarter results were slightly below our expectations. Total sales were up 8.8% year over year thanks to solid visioncare performance driven by a recovering supply chain, pricing actions, and share wins in daily lenses. Demand on the surgical side slipped sequentially, but we view this as a normalization of the market rather than weak performance from Alcon. Management trimmed the upper end of its full-year sales guidance to $9.4 billion from $9.5 billion due to higher-than-expected pressures from foreign exchange. After updating our model, we maintain our $64 fair value estimate.