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ConvaTec Group PLC CTEC

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Stock XLON Rating as of
GBX 257.80 −17.80 (6.46%)
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As of Delayed Price Closed
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Company Report

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Convatec Earnings: Investments in Innovation and Commercial Organization Set Up Strong 2024

Debbie Wang

Convatec finished the year with increasing strength, and we’ve increased our fair value estimate to $13.80 (GBX 271) per share. While green shoots since 2022 demonstrated mild progress as Convatec sought to engineer a turnaround, the last six months have been an inflection point, and we think the firm is firmly on the path to realizing its potential. While the rise in medical utilization likely boosted Convatec’s performance in 2023, the firm had also invested in its innovation and commercial organization and was prepared for these favorable conditions. We’ve long thought that Convatec had the ingredients to support a narrow moat, and the firm is getting closer to realizing that potential as it rides a wave of new product launches.

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Price vs Fair Value

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CTEC is trading at a 6% premium.
Price
GBX 286.60
Fair Value
GBX 197.00
Uncertainty
Medium
1-Star Price
GBX 853.49
5-Star Price
GBX 523.40
Economic Moat
Csmvnvr
Capital Allocation
Rgrxqycm

Bulls Say, Bears Say

Bulls

Convatec's well-established footprint in the U.S. ostomy market has paved the way to forge contracts with large group purchasing organizations, including Premier and Vizient.

Bears

Considering that ostomy patients tend to be brand loyal after the first year postdischarge, we expect Convatec's ostomy business to grow gradually as it takes greater share of new patient discharges.

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Trading Information

Previous Close Price
GBX 275.60
Day Range
GBX 255.80–268.40
52-Week Range
GBX 2.48–295.20
Bid/Ask
GBX 0.00 / GBX 0.00
Market Cap
GBX 528.44 Bil
Volume/Avg
21.9 Mil / 7.8 Mil

Key Statistics

Price/Earnings (Normalized)
24.51
Price/Sales
3.39
Dividend Yield (Trailing)
1.90%
Dividend Yield (Forward)
1.90%
Total Yield
1.90%

Company Profile

Originally spun out of Bristol-Myers Squibb, Convatec designs, manufactures, and markets advanced wound care, ostomy, continence care, and infusion sets for the acute-care hospital and chronic-care home settings. Advanced wound care and ostomy supplies are the largest divisions, accounting for 33% and 29% of total revenue, respectively. Continence care has become a slightly smaller business (21% of revenue) following the decision to exit the acute care market, and infusion sets contribute 17% of consolidated revenue.
Sector
Healthcare
Industry
Medical Instruments & Supplies
Stock Style Box
Mid Growth
Total Number of Employees
10,136
Website
https://www.convatecgroup.com

Competitors

Valuation

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Metric
CTEC
SNN
BDX
Price/Earnings (Normalized)
 24.5113.4319.43
Price/Book Value
 4.402.052.64
Price/Sales
 3.391.923.44
Price/Cash Flow
 19.4711.3520.60
Price/Earnings
CTEC
SNN
BDX

Financial Strength

Metric
CTEC
SNN
BDX
Quick Ratio
 0.790.670.46
Current Ratio
 1.621.771.08
Interest Coverage
 3.212.844.17
Quick Ratio
CTEC
SNN
BDX

Profitability

Metric
CTEC
SNN
BDX
Return on Assets (Normalized)
 7.44%7.27%3.40%
Return on Equity (Normalized)
 16.69%13.79%7.05%
Return on Invested Capital (Normalized)
 10.90%9.92%5.04%
Return on Assets
CTEC
SNN
BDX
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