Shares of Cooper Cos., which is moving its headquarters from Lake Forest to Pleasanton, were downgraded Tuesday by an analyst who said its profits could fall in the next 12 months as it sells more daily contact lenses and fewer more profitable products.
Cooper’s shares were down about 5% in midday New York trading with a market value of about $2 billion.
JPMorgan analyst Michael Weinstein downgraded the maker of contact lenses and women’s surgical products to “underweight” from “neutral.”
Weinstein, in a report, said Cooper could earn $114.2 million in the 12 months through next October, down from a previous estimate of $129.9 million.
Weinstein’s new estimate includes $6.2 million in litigation costs, which he said are a recurring item for Cooper.
Daily contacts and silicone hydrogel lenses, such as Cooper’s long-delayed Biofinity, have lower profits than toric lenses, which correct astigmatism and are shaped differently than standard spherical lenses, and that competition for toric lenses is increasing, Weinstein said in his report.
Cooper is planning to bring Biofinity to market in 2008, along with a daily version of ProClear and a separate silicone hydrogel lens that will last two weeks, Weinstein said.
Last month, new Chief Executive Robert Weiss said the company will be “de-emphasizing OC” and transferring most of its primary functions to Pleasanton, where he and other key officials are based.
Weiss replaced longtime leader A. Thomas Bender, who worked from Lake Forest, as chief executive on Sept. 1.
