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

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.