Cochlear Ltd (ASX: COH) shares were sold off heavily last week on a first-half profit result that the market clearly did not like.
The question now is, what's next for Cochlear shares? We've had a look at the opinions of four major brokers, and it's fair to say they all seem to think the share price sell-down last week was overdone.
But first, let's have a look at the profit result.
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Weak set of numbers
Cochlear last week reported revenue, which was just 1% higher (or down 2% in constant currency terms) to $1.176 billion, while underlying net profit fell 9% to $195 million.
The company kept its interim dividend steady at $2.15 per share, which represents a 72% payout of underlying net profit.
While the company's net profit fell for the half, it said it expected a strong second half, "driven by the broad availability of the Nexa System, strong growth in services and improved momentum for acoustics''.
In terms of the numbers, the company said its expected underlying full-year net profit to come in at the lower end of the $435 to $460 million guidance range provided in August 2025, "reflecting the longer than anticipated contracting process for the Nexa Implant System in the first half''.
The company added:
As we look to the future, we remain confident of the opportunity to grow our markets. There remains a significant, unmet and addressable clinical need for cochlear and acoustic implants that is expected to continue to underpin the long-term sustainable growth of the business. Our clear growth opportunity and the rising awareness of the link between cognitive decline and hearing loss, combined with a strong balance sheet, mean we are well placed to create value for our stakeholders now, and over the long term.
Shares looking cheap
Now to the brokers, and UBS has a bullish price target of $350 on Cochlear shares compared with $203.70 on Monday.
They do point out that the strong Australian dollar is a headwind for Cochlear, even though the company has a hedging program.
UBS said while the company reported market share losses in the first half, a recovery was expected in the second half, with Cochlear expecting 10% top-line growth.
UBS has a buy recommendation on the shares.
The Barrenjoey team has a neutral rating on the stock, while it still has a bullish price target of $241.50 for Cochlear shares.
They said they saw the company's medium and long-term growth drivers as "attractive'', with a large addressable market with unmet needs, and high barriers to entry for competition.
Canaccord Genuity has a buy rating on the stock but has reduced its price target to $295 per share from $330.
They also said the share sell-down last week was overdone.
And finally, Macquarie has a neutral recommendation on the stock, albeit with a positive share price target of $239.
