Sonova H Ag

Bernstein has named Sonova as its short-term top pick and Alcon as its preferred long-term idea in a new H2 playbook for European medtech, assigning both "outperform" ratings with price targets of CHF 275 and CHF 76.15, respectively. Sonova, the world's No. 1 player in the $7.7 billion hearing aid wholesale market with roughly a 25% unit share, is expected to benefit from a multi-pronged growth setup into its H1 2026/27E results in November, with Bernstein forecasting H1 wholesale organic growth of 10.1% versus consensus at 8% and Group organic growth of 6.5% versus consensus of 4.9%. The bull case rests on continued strength from the EON Sphere launch, further share gains at Costco, where the Infinio-based device only entered the channel in March 2026, and another seven months of tailwind from Virto R hearing aid sales, plus a sharp H2 improvement in the Cochlear Implant business and accelerating M&A contribution in Retail as rivals Demant and Amplifon remain financially constrained. Bernstein's core EBIT estimates sit 5-8% above consensus across 2026/27E-2028/29E. On Alcon, the dominant ophthalmology player holding #1 or #2 positions across most of its sub-markets, Bernstein argues investor sentiment on the intraocular lens and consumables businesses has become "overly negative" and that the pressure is "largely transitory," expecting implantables growth to accelerate to 4% in 2027. Bernstein's constant-currency revenue growth estimates run 38-112 bps above consensus for 2026E-2028E, with core EPS estimates 1-9% higher, and at roughly 17x NTM P/E it sees an attractive entry point into what it calls a "multi-year compounding business."

Sonova Holding AG reported a 17.3% increase in normalized EBITDA to $794 million for fiscal year 2025-26, with the margin improving 240 basis points in local currencies to 23.7%. Total segment sales rose 7.5% to $3.4 billion, driven by a 9.5% increase in wholesale revenues to $1.9 billion and a 5.1% rise in retail revenue to $1.5 billion. Cochlear implant sales reached $252 million, down 11% overall, or 3.8% lower excluding China, amid competitive pressure and the introduction of VDP in China. Exchange rate developments negatively impacted normalized EBITDA by CHF130 million, reducing the margin by 1.5 percentage points. The company proposed a 7% dividend increase to 4.70 per share and issued an outlook for fiscal 2026-27 of 5% to 8% consolidated sales growth and 7% to 10% core EBIT growth at constant exchange rates.