Alcon Inc. (ALC): A Bull Case Theory

We came across a bullish thesis on Alcon Inc. on Latticework’s Substack by MOI Global Equity Research. In this article, we will summarize the bulls’ thesis on ALC. Alcon Inc.'s share was trading at $81.15 as of January 29th. ALC’s trailing and forward P/E were 38.64 and 22.73  respectively according to Yahoo Finance.

Alcon is the world’s largest pure-play eye care device company, headquartered in Switzerland and spun out of Novartis in 2019, operating across two complementary segments: Surgical, which represents roughly 56% of revenue, and Vision Care, contributing the remaining 44%. Pieter frames the investment through a quality-growth lens, highlighting Alcon’s market leadership in a structurally attractive $35 billion total addressable market and its consistent ability to gain share through innovation and selective bolt-on acquisitions.

The Surgical segment, generating approximately 60% of EBIT, underpins the core of the thesis due to its durable moat built around a razor-razorblade model. Alcon’s installed base of roughly 28,000 surgical systems anchors recurring, high-margin consumables and implantables, reinforced by strong brand leadership in premium intraocular lenses such as PanOptix and Vivity. These dynamics create meaningful switching costs, support pricing power, and provide long-term visibility into cash flows.

The Vision Care business operates in a more consumer-oriented B2C market, competing on product comfort, technology, and cost while benefiting from secular tailwinds tied to aging demographics and rising vision correction needs. Pieter points to Alcon’s demonstrated market share gains, with global vision care share increasing from 11.7% in 2020 to 13.5% in 2024, as evidence of competitive strength. The crux of the investment case lies in margin expansion and improving returns on invested capital, which Pieter believes the market is underappreciating despite ROIC already rising from 6.1% in 2021 to 14.0% in 2024.

The primary catalyst is the multi-year rollout of the new UNITY surgical platform, designed to replace the existing installed base and enhance hospital efficiency and economics, potentially driving operating margins toward the 20–25% range. While execution risk remains, Pieter’s valuation framework assumes ~7% revenue CAGR and applies a 20x P/E multiple, resulting in a $65 to $138 valuation range. Relative to the current share price near $72, he views Alcon as offering a compelling asymmetric upside as the platform replacement cycle unfolds.

Previously we covered a bullish thesis on Alcon Inc. (ALC) by Kontra Investment Xchange in December 2024, which highlighted the company’s leadership across surgical and vision care, robust innovation pipeline, and exposure to secular ophthalmology growth. The company's stock price has depreciated approximately by 8.66% since our coverage. This is because the thesis didn’t fully play out amid valuation compression. The thesis still stands as end-market growth remains intact. MOI Global Equity Research shares a similar but emphasizes on margin expansion and the UNITY platform rollout.

Alcon Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held ALC at the end of the third quarter which was 34 in the previous quarter. While we acknowledge the potential of ALC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.