ConvaTec Delivers Strong 2021 and Is Poised for More in 2022; No Change to Our Fair Value Estimate

ConvaTec posted full-year results that ran slightly ahead of our expectations on the top and bottom lines, but not enough to materially shift our fair value estimate. On the whole, we’re heartened to see some green shoots as ConvaTec persists in its turnaround, which has been hindered by the pandemic. We were pleased to see 2021 revenue grow 6% in constant currency, fed by strength in advanced woundcare and infusion sets. This is very respectable top-line growth--the strongest we’ve seen since 2014--against decent 2020 performance that held up to COVID-19 relatively well. We think this progress underscores our view of the narrow moat at ConvaTec, which benefits from structural advantages in switching costs and intangible assets.