Highlights

  • Underlying net profit declined 9% YoY to AUD 194.8 million in HY26.
  • Shares fell 14.72% to AUD 209.47 following the results release.
  • Jefferies and Canaccord Genuity issued Buy ratings with targets of AUD 345 and AUD 330, respectively..

Cochlear Limited (ASX:COH) reported lower first-half earnings for FY26, with profit impacted by contracting delays for its newly launched implant system and one-off expenses. Shares fell 14.72% to AUD 209.47 by 10:47am on 13 February 2026. Despite the decline, brokers Jefferies and Canaccord Genuity have issued Buy ratings, setting target prices of AUD 345 and AUD 330, respectively.

Brokers See Upside After Sell-Off

Jefferies placed a Buy rating on Cochlear with a price target of AUD 345, while Canaccord Genuity also maintained a Buy call with a AUD 330 target. Compared with the current share price of AUD 209.47, the targets indicate potential upside of more than 50% and 57% respectively.

The broker endorsements comes when the company released its half-year result, which showed earnings pressure linked to a longer-than-anticipated product registration and contract renewal process for the newly launched Cochlear™ Nucleus® Nexa™ System.

Revenue Edges Higher, Profit Declines

Sales revenue for the half year ended December 2025 rose 1% to AUD 1,176 million, although it declined 2% in constant currency terms.

Underlying net profit fell 9% to AUD 194.8 million, while statutory net profit dropped 21% to AUD 161.5 million. Underlying earnings per share decreased to AUD 2.98 from AUD 3.26 in the prior corresponding period.

Gross margin declined two percentage points to 73%, driven by a higher mix of lower-margin emerging market sales. Operating expenses increased 1%, including higher research and development investment, which rose 9% to AUD 152.8 million.

One-off items after tax included AUD 23.7 million in cloud computing-related expenses and a AUD 9.6 million non-cash write-down linked to investments.

An interim dividend of AUD 2.15 per share was declared, unchanged from last year, representing a 72% payout of underlying net profit. The dividend will be paid on 13 April 2026.

Implant Launch and Operational Trends

Cochlear launched the Nucleus Nexa System in June 2025, described as the first smart cochlear implant system with upgradeable firmware. The rollout required regulatory approvals and contract renegotiations, including price adjustments, which extended longer than anticipated during the half.

Cochlear implant unit sales increased 6% to 27,016 units, although revenue remained flat at AUD 724.0 million due to a higher mix of lower-priced emerging market units.

Services revenue rose 2% to AUD 311.6 million, while Acoustics revenue was steady at AUD 140.4 million.

For FY26, management expects underlying net profit to be at the lower end of the AUD 435–460 million guidance range. Foreign exchange movements could reduce profit by approximately AUD 30 million if current currency levels persist.

Cochlear’s first-half result showed modest revenue growth but lower profit due to contracting delays, product mix and one-off costs. The launch of the Nucleus Nexa System and investment in research and development remain central to its FY26 outlook. While shares dropped sharply on the day, broker targets from Jefferies and Canaccord Genuity place attention on valuation levels following the decline.

F&Q

  1. Why did Cochlear’s share price fall?
    The decline followed a 9% drop in underlying net profit, a 21% fall in statutory net profit and guidance indicating earnings at the lower end of the FY26 range.
  2. What are the broker target prices for Cochlear?
    Jefferies set a target price of AUD 345, while Canaccord Genuity set a target of AUD 330.
  3. What dividend did Cochlear declare?
    The company declared an interim dividend of AUD 2.15 per share, unchanged from the previous year.