The Cochlear Limited (ASX: COH) share price has been a positive performer on Friday.
In afternoon trade, the hearing solutions company’s shares are up 1.5% to $248.50.
This latest gain means the Cochlear share price is now up a sizeable 31% since the start of the year.
Why is the Cochlear share price pushing higher today?
Investors have been buying the company’s shares on Friday after it was the subject of a bullish broker note out of Macquarie Group Ltd (ASX: MQG) this morning.
According to the note, the broker has retained its outperform rating and lifted its price target on the company’s shares to $264.00.
Based on the current Cochlear share price, this implies potential upside of 6% over the next 12 months.
Why is Macquarie a fan of Cochlear?
The broker made the move following its latest survey of 12 US-based audiologists that specialise in cochlear implants. That survey revealed that Cochlear’s products were regarded as the best in their class for performance and features, outperforming rivals such as Med-El and Advanced Bionics.
In addition to this, the survey shows that cochlear implants patient numbers have been improving. So much so, new patient numbers are now higher than pre-COVID levels. This bodes well for Cochlear, particularly given how the survey indicates that it is winning market share and is expected to continue doing so in the next 12 months.
In light of the above, Macquarie is now forecasting earnings per share of ~$3.65 in FY 2021 and then $4.89 in FY 2022. Based on the current Cochlear share price, this means that its shares are currently changing hands at 51x estimated FY 2022 earnings.
While this is a premium to the market average, it is a price that Macquarie appears to believe is more than fair for such a quality company.