Bernstein has named Swiss hearing-aid maker Sonova and ophthalmology company Alcon as its top European medtech stock picks for the second half, pointing to improving fundamentals in both businesses amid a sector that endured a difficult year.
European medtech experienced a "bruising year" in 2026, with only Demant and Sonova outperforming the Stoxx 600 as the sector's premium valuation de-rated, according to the firm.
Bernstein designated Sonova its short-term top pick with an "outperform" rating and a price target of CHF 275. The company is the world's No. 1 player in the $7.7 billion hearing aid wholesale market, holding roughly 25% of unit share. Growth is expected heading into its H1 2026/27 results in November.
Bernstein forecasts H1 wholesale organic growth of 10.1%, ahead of a consensus estimate of 8%, and Group organic growth of 6.5% versus a consensus of 4.9%. The bull case rests on strength from the EON Sphere launch, share gains at Costco where the Infinio-based device entered the channel in March 2026, and seven months of tailwinds from Virto R hearing aid sales. The firm also anticipates a sharp H2 improvement in the Cochlear Implant business and accelerating M&A contributions in Retail as rivals Demant and Amplifon remain financially constrained. Core EBIT estimates sit 5–8% above consensus across 2026/27E through 2028/29E.
Alcon was chosen as the preferred long-term idea, also rated "outperform," with a price target of CHF 76.15. Bernstein described the company as the dominant ophthalmology player, holding number one or number two positions across most of its sub-markets.
Investor sentiment on Alcon's intraocular lens and consumables businesses is "overly negative" and "largely transitory," the firm said. PanOptix Pro drove sequential gains following its Q2 2025 launch, and a similar pattern is expected with Vivity Pro in 2027, despite Johnson & Johnson's PureSee launch weighing on the U.S. market through Q3 and Q4 2026E.
Implantables growth is projected to accelerate to 4% in 2027. Constant-currency revenue growth estimates run 38–112 basis points above consensus for 2026E–2028E, with core EPS estimates 1–9% higher. Alcon trades at roughly 17 times next-twelve-months earnings, which Bernstein views as an attractive entry point.
