What Happened?
Shares of eyecare company Bausch + Lomb (NYSE: BLCO) jumped 4.2% in the morning session after Morgan Stanley upgraded its rating on the stock to "Overweight" from "Equal Weight.". The investment bank also adjusted its price target, citing what it described as the strongest product pipeline in the ophthalmology, or eye care, field. According to the bank's note, several disruptive products were expected to support the company's growth in the longer term. In addition, the firm highlighted that Bausch + Lomb's efficiency measures were helping its profit margins over the next few years.
After the initial pop the shares cooled down to $17.19, up 3.6% from previous close.
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What Is The Market Telling Us
Bausch + Lomb’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 4.6% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
Bausch + Lomb is down 4.5% since the beginning of the year, and at $17.19 per share, it is trading 16.8% below its 52-week high of $20.65 from December 2024. Investors who bought $1,000 worth of Bausch + Lomb’s shares at the IPO in May 2022 would now be looking at an investment worth $859.25.
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