On Tuesday the Cochlear Limited (ASX: COH) share price was one of the best performers on the S&P/ASX 200 index with a gain of almost 8%.
Investors were fighting to get hold of the hearing solutions company's shares after it announced the launch of the Nucleus Profile Plus Series cochlear implant.
This implant has been designed for routine 1.5 and 3 Tesla magnetic resonance imaging scans without the need to remove the internal magnet.
Management advised that its commercial availability will commence in Germany, with other European countries to follow in the near term. After which, the product will be launched across other developed markets over the coming months, subject to the timing of regulatory approvals.
The market appears to believe this product has the potential to give its top line and real boost and seized on recent share price weakness to pick up shares yesterday.
Is it too late to invest?
I don't believe it is too late to invest and feel Cochlear would be a great long term investment due to the ageing population tailwind, its high quality products, and its global distribution.
One broker which agrees that it isn't too late to invest is Goldman Sachs.
According to a note out of the investment bank this morning, its analysts have upgraded Cochlear's shares to a buy rating and lifted the price target on them to $197.00 from $173.00.
Even after yesterday's stellar gain, this price target implies potential upside of 9% over the next 12 months excluding dividends.
Why is Goldman bullish on Cochlear?
Goldman is bullish on Cochlear due to is leading share in "a structural growth market which is characterized by attractive demographics, relatively favourable pricing, substantial penetration upside and high barriers to entry."
In addition to this, the launch of the Nucleus Profile Plus Series cochlear implant has led to the broker upgrading its growth forecasts by 4% in FY 2020 and 5% in FY 2021.
Goldman now expects earnings per share of $5.29 in FY 2020 and $5.98 in FY 2021. This will be annual growth of just over 13% for both years.
Should you invest?
I think Goldman is spot on with its recommendation and believe Cochlear would be a great investment along with fellow healthcare stars CSL Limited (ASX: CSL) and ResMed Inc (ASX: RMD).
