Are Cochlear Limited shares worth $100?

One leading investment bank has slapped a hold rating on Cochlear Limited (ASX:COH), with a price target of $82, but another says they're worth $100.

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There's a lot to like about Cochlear Limited (ASX: COH), the world's leading implantable hearing aid device manufacturer.

Not only are its products best-in-class, it also has defensive earnings, global exposure and is run by capable personnel.

Contrary to popular belief, Cochlear may not experience the positive effects of a falling Australian dollar in the short-term because a stronger US dollar will hinder sales revenue from foreign markets. Only 43% of Cochlear sales come from the Americas.

However, over the medium to long-term, there are many reasons to believe Cochlear shares will continue outperforming the market.

For example, the Baha 4 and Nucleus 6 range of devices are arguably the group's most exciting products in its 50-year history. Moreover, reporting in US dollars will see costs fall at the group's local manufacturing sites.

Is Cochlear a $100 stock?

Cochlear shares are currently sitting at $86, down from their April highs over $93. Given the recent falls in the company's share price, analysts at leading investment banks have moved to upgrade the stock – although some value targets are below current prices.

For example, both UBS and Deutsche Bank raised their price targets on Cochlear shares this week, to $79.40 and $82, respectively.

However, those numbers are in stark contrast to the intrinsic value estimates slapped on it by analysts at Goldman Sachs and Macquarie Group last month.

Goldman believes it's worth $95 a share (an 11% premium to today's prices) whereas Macquarie went with the tidy figure of $100 (a 16% premium).

Foolish takeaway

The short-term outlook for Cochlear might not be spectacular, but in my opinion its long-term outlook is great. I'm not prepared to say Cochlear will hit $100 soon, but I think it'll get there eventually.

That's why I recently bought shares.

Motley Fool contributor Owen Raskiewicz owns shares of Cochlear Ltd.. Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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