The Cochlear Limited (ASX: COH) share price has been charging higher again on Wednesday.
In morning trade, the hearing solutions company's shares are up 7% to $222.02.
This means the Cochlear share price is now up over 16% in the space of two days.
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Why is the Cochlear share price storming higher?
Investors have been bidding the Cochlear share price higher since the release of a stronger than expected half year result.
For the six months ended 31 December, Cochlear delivered a 26% increase in half year underlying net profit to $158 million. This was well ahead of the market consensus estimate and has led to many brokers upgrading their estimates and recommendations.
One of those is the team at Goldman Sachs.
What did Goldman say?
According to a note this morning, the broker has upgraded the company's shares to a buy rating with a $237.00 price target.
It was very pleased with its performance and notes that Cochlear is a "clear leader in a defensive industry with improving fundamentals."
Goldman commented: "There is little doubt around the long-term, defensive nature of the cochlear implant (CI) market, or COH's competitive position within it. Rather, the largest recent debates have revolved around the extent to which surgery restrictions, staffing limitations and changes to patient/physician behaviour will preclude a strong volume profile from returning."
"Whilst volatility clearly remains, on all fronts we are now more comfortable than any time since the start of the pandemic. Even after today's +5% upgrade, we believe guidance appears more realistic/beatable than for several years (COH has shown a mixed track record in this regard for some time). Covid-driven disruption is falling in most key markets, and we see scope for a clear sequential improvement in both earnings and sentiment towards this stock," it added.
Goldman Sachs also highlights the company's huge cash balance of $506 million. It notes that "COH has little need to maintain such a material cash balance and, as conditions continue to improve, we expect management to more strongly prioritise any number of accretive deployment opportunities."
