Top broker sees 19% upside in the Cochlear (ASX:COH) share price

Are Cochlear’s shares in the buy zone?
The post Top broker sees 19% upside in the Cochlear (ASX:COH) share price appeared first on The Motley Fool Australia. –

The Cochlear Limited (ASX: COH) share price has been a poor performer in recent weeks.

Since hitting a record high of $257.76 in mid-August, the hearing solutions company’s shares have fallen 17% to $214.85.

Why is the Cochlear share price falling?

A good portion of the decline in the Cochlear share price has come in recent weeks after the company made an announcement.

That announcement revealed that a complaint for patent infringement has been filed by the University of Pittsburgh in the United States District Court for the Western District of Texas, Waco division.

The release reveals that the patent in question is related to a wireless energy transfer system. It was filed at the US Patent Office in 2009 and will expire in 2030.

However, management does not believe that its products infringe the University’s patent and will defend the lawsuit.

It highlights that Cochlear’s legacy products and related patents predate the University’s patent by several years. Furthermore, these earlier legacy products and patents embody the alleged invention of the patent and, accordingly, Cochlear believes the patent is invalid.

Is this a buying opportunity?

One leading broker that is likely to see the weakness in the Cochlear share price as a buying opportunity is Macquarie Group Ltd (ASX: MQG).

According to a recent note, the broker has an outperform rating and $256.00 price target on the company’s shares. Based on the current Cochlear share price, this implies potential upside of 19% over the next 12 months.

And while Macquarie has not commented on the patent dispute, it is worth noting that another broker has and isn’t concerned.

Last week Citi said that it expects the case to be immaterial to Cochlear. This is due to the company’s own wireless energy transfer patents predating those of the University of Pittsburgh.

In addition, the broker doesn’t expect the news to disrupt Cochlear’s existing and future business in a meaningful way.

Citi currently has a hold rating and $220.00 price target on the Cochlear share price.

The post Top broker sees 19% upside in the Cochlear (ASX:COH) share price appeared first on The Motley Fool Australia.

Should you invest $1,000 in Cochlear right now?

Before you consider Cochlear, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Cochlear wasn’t one of them.

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More reading

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ASX 200 (ASX:XJO) midday update: Telstra buys Vita stores, Cochlear sinks

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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