Coloplast Earnings: Revenue Growth Remains Solid, but Margin Drag Likely to Last Into 2024

Coloplast wrapped up its fiscal year with a strong performance in the fourth quarter, but management's outlook for fiscal 2024, which assumed ongoing cost pressures would keep operating margin below the firm's historical benchmark of 30%, caused shares to fall by 7%. We're leaving our DKK 962 unchanged, as the firm's full-year results hewed closely to our estimates, and our projections for fiscal 2024 remain bound by management's guidance. We continue to hold measured expectations for operating margin to return to the 30% level in fiscal year 2026. However, progress in commercializing new platforms in ostomy and continence care, such as Heylo for early leak detection in ostomy and the Luja catheter that demonstrably leaves less retained urine that is conducive to the development of urinary tract infection, underscore our confidence in Coloplast's wide economic moat.