Coloplast Faces Margin Pressure, but We See No Cracks in Its Narrow Economic Moat

Coloplast posted respectable fiscal first-quarter results that fell slightly short of its long-term revenue growth and margin goals but hit our projections nearly on the nose. Accordingly, we’re holding steady on our fair value estimate of DKK 933 per share. While surges in COVID-19 continue to put near-term pressure on Coloplast and underlying nonpandemic procedure volume, we’ve seen little to suggest that the company's narrow economic moat has developed any cracks. Coloplast remains a powerful innovator in thoughtful, patient-friendly product development for ostomy and continence care, which forms the basis of its intangible assets.