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March 7, 2005

UBS Has Grown Increasingly Positive On Cochlear

From: Australasian Investment review - Sydney,Australia - Mar 7, 2005

March 07 2005 - Australasian Investment Review – (AIR)

Having looked more closely at the company's recent acquisition, UBS has lifted its price target and earnings forecasts for Cochlear (COH).

The company recently acquired Entific, which makes products for the severely hearing impaired.

As this market is slightly different to COH's the broker notes there won't be any cannibalisation of COH's existing market, but rather will offer significant synergies that will reduce the acquisition price to about 18x earnings.

UBS's EPS forecasts have increased in FY05 by 1.6% to $1.03, in FY06 by 4.5% to $1.15 and in FY07 by 11% to $1.26, while its valuation and target price have increased to $35.50 from $34.10.

The broker rates the stock Buy 2.

Copyright Australasian Investment Review.