Alcon Gets Rare Sell Rating as BofA Flags Earnings Growth Risk
(Bloomberg) — Alcon Inc., the Swiss eye-care specialist, got its first bearish mark from analysts since August after Bank of America Corp. double downgraded the stock, warning that a slower rollout of its new eye-surgery machines will pressure profit growth.
Julien Ouaddour lowered his rating to underperform from buy and is now the most pessimistic among analysts tracked by Bloomberg. He also slashed his 12-month price target to 60 Swiss francs, slightly below currently levels. Installations for the Unity system, used for vitreoretinal and cataract surgery, are tracking below the bank’s expectations, he added.
“A key pillar of the bull thesis for Alcon has been Unity’s launch driving earnings upgrades,” Ouaddour wrote in a note Thursday. “However, with management recently scaling back its ramp-up plan, we believe consensus still underestimates the impact of slower adoption – limiting upside potential.”
The shares fell 0.7% to 63.54 Swiss francs as of 11:06 a.m. local time. They’re down 17% this year, putting the stock on track for its biggest annual drop in three years.
Alcon announced the launch of the next-generation Unity Vitreoretinal Cataract System, also known as Unity VCS, in April and plans to introduce the standalone cataract version in the coming months.
According to Ouaddour, Alcon’s management had previously estimated that 3,000 to 4,000 Unity machines could be installed each year in 2026 and 2027. These figures were revised to roughly 2,400 Unity VCS/CS machines in 2026 and about 3,000 in 2027, Ouaddour said, citing an updated annual installations chart at a conference in September.
“Any disappointment on Unity’s trajectory could further weigh on sentiment and reinforce downside risk for the stock,” Ouaddour said.
Analysts are still overwhelmingly positive on the stock. It now has 24 buy recommendations among analysts tracked by Bloomberg, 8 holds and one sell-equivalent.
–With assistance from Joe Easton.
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