CooperCompanies Earnings: A Tepid Start to 2025, but Long-Term Growth Outlook Remains Intact

Narrow-moat CooperCompanies reported first-quarter earnings that were largely in line with our expectations. Total sales of $965 million were up 4% year over year, slightly falling short of market consensus. This appears to have rattled investors, causing shares to drop 5% in after-hours trading. We view this as a minor setback due to channel inventory contraction, but the business has quickly regained momentum, and we continue to expect moderate growth in 2025. Following this quarter’s results, management has reiterated its sales guidance of $4.08 billion-$4.16 billion and raised the lower end of its earnings per share outlook, now forecasting a range of $3.94-$4.02. We maintain our fair value estimate of $90 per share.