Cochlear Ltd (ASX: COH) shares just had a week to forget.
Despite closing up 2.47% on Friday to end the day at $97.35 a share, the S&P/ASX 200 Index (ASX: XJO) hearing solutions company ended the week down almost 43%.
That's far worse than the almost 2% loss posted by the benchmark index this week.
We'll take a look at why this week's fall could see Cochlear shares trading at a long-term bargain below.
But first…
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What on Earth happened to Cochlear shares this week?
The bulk of the losses for the ASX 200 healthcare stock came on Wednesday.
Cochlear shares closed the day down a very painful 40.7% following a decidedly disappointing trading update.
Investors were overheating their sell buttons after the company slashed its full-year FY 2026 profit guidance and flagged slumping demand for its implants in developed markets.
Atop the softer trading conditions in developed markets, Cochlear also said that it could be impacted by cancelled orders and delayed deliveries to its Middle East markets amid the ongoing conflict.
On the profit front, Cochlear slashed its FY 2026 underlying net profit guidance to between $290 million and $330 million. That's a sharp decline from prior guidance of $435 million to $460 million.
Despite the current woes, Cochlear CEO Dig Howitt was optimistic about the company's outlook.
Howitt said:
We remain confident of our market leadership. We have seen strong adoption of the Nucleus System across the developed markets, with very positive customer feedback and a strong interest in exploring the system's potential to further improve hearing outcomes.
Why this ASX 200 stock could be set to bounce
Following this week's selling, Filip Tortevski, senior analyst at Wealth Within, said that Cochlear shares may now present ASX investors with "the best bargain of the year".
"Cochlear Limited has just delivered one of the sharpest selloffs in ASX history," he noted.
According to Tortevski:
That sounds alarming, but the drivers are largely cyclical and external, including US Medicaid funding changes, hospital capacity constraints in Europe, and currency headwinds, not a breakdown in the company's core business.
The stock was already down more than 30% over the past year, meaning much of the risk had been building. Historically, Cochlear has recovered from similar earnings resets as demand normalises, suggesting this could be one of the most compelling valuation resets on the ASX today.
Tortevski concluded, "Watch around the $100 level [for Cochlear shares] like a hawk as there are many technical reasons why this stock could bounce from here."
