Coats Group plc (COA) AI Stock Analysis

• Market Cap: £1.21B
• Dividend Yield: 3.2%
• Average Volume (3M): 4.53M
• Price to Earnings (P/E): 15.0
• Beta (1Y): 1.03
• Revenue Growth: 4.70%
• EPS Growth: 26.05%
• Country: UK
• Employees: 16,042
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Apparel - Manufacturers
• EPS (TTM): 0.03
• Shares Outstanding: 1,597,810,400
• 10 Day Avg. Volume: 6,487,494
• 30 Day Avg. Volume: 4,533,406
• PEG Ratio: 4.87
• Price to Book (P/B): 1.82
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.38
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: 0.33
• Enterprise Value/Gross Profit: 3.35
• Enterprise Value/Ebitda: 1.84
• 1Y Price Target: £125.00
• Price Target Upside: 59.64% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 73 Outperform
• Price Target: 86.00p ▲(9.83%Upside)

Coats Group plc shows a strong overall performance, driven by solid financial results, reasonable valuation, and positive corporate actions. High leverage and cash flow pressures present challenges that need addressing.

Positive Factors

Financial Targets

Coats Group's new medium-term financial targets indicate a more resilient earnings growth profile than historically, offering further re-rating potential.

Revenue Growth

Coats has delivered OCC revenue growth of 4% over the first four months of the year, capturing some of the disruption following Liberation Day.

Strategic Exits

Exiting the US Yarns business will increase Performance Materials margins to 8.2%, with potential for over 10% margins after cost savings.

Negative Factors

Pricing Pressure

There is potential for pricing pressure down the apparel and footwear supply chain as brands look to minimize their own margin hit from tariffs.

Share Price Reaction

A lacklustre share price reaction to new financial targets is disappointing.

Tariffs

The group's Southeast Asian manufacturing footprint is currently facing high levels of tariffs.

Coats Group plc Business Overview & Revenue Model

Company Description

Coats Group plc is a global industrial thread manufacturer and a leading player in the textiles and apparel sectors. The company specializes in producing threads, zips, and trims for clothing, footwear, and accessories, as well as providing technical products for non-apparel markets such as automotive, telecommunications, and personal protection. With a rich history and presence in over 50 countries, Coats Group plc serves a diverse customer base including manufacturers, designers, and retailers.

How the Company Makes Money

Coats Group plc generates revenue primarily through the sale of its industrial threads and related products. The company's revenue streams are driven by its two main business segments: Apparel & Footwear and Performance Materials. In the Apparel & Footwear segment, Coats provides threads, zips, and trims used in the manufacturing of garments and shoes. The Performance Materials segment involves the sale of technical products used in a variety of industries such as automotive, telecommunications, and personal protection. Coats benefits from long-term relationships with key clients across the globe, leveraging its extensive distribution network and innovative product offerings to maintain its market position. Additionally, the company invests in research and development to improve product performance and sustainability, which enhances its competitive advantage and revenue potential.

Coats Group plc Financial Statement Overview

Summary

Coats Group plc shows solid financial performance with notable revenue growth and healthy operating margins. However, the high leverage reflected in the balance sheet poses potential risks, and the decrease in free cash flow indicates pressure on cash flow management.

Income Statement

Coats Group plc has demonstrated consistent revenue growth with a recent increase of 7.66% from 2023 to 2024. The gross profit margin is solid at 34.04%, indicating strong pricing power and cost control. However, the net profit margin is moderate at 5.34%, suggesting room for improvement in operating efficiency. EBIT and EBITDA margins of 13.31% and 18.54% respectively show healthy operational performance.

Balance Sheet

The company has a relatively high debt-to-equity ratio of 1.96, indicating significant leverage. Stockholders' equity decreased over the past year, affecting the equity ratio, which stands at 21.49%. Return on equity is moderate at 23.14%, suggesting efficient use of equity in generating profits, despite the high leverage.

Cash Flow

Free cash flow decreased by 26.71% from 2023 to 2024, indicating potential cash flow management issues. However, the operating cash flow to net income ratio is robust at 1.20, suggesting good cash generation relative to profit. The free cash flow to net income ratio of 0.85 further supports the company's ability to generate cash relative to its earnings.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.50B	1.39B	1.58B	1.50B	1.16B
Gross Profit	511.00M	483.30M	486.80M	484.30M	351.80M
EBITDA	278.20M	260.40M	233.30M	230.40M	155.40M
Net Income	80.10M	56.50M	94.90M	88.90M	42.20M
Balance Sheet
Total Assets	1.61B	1.71B	1.92B	1.51B	1.21B
Cash, Cash Equivalents and Short-Term Investments	146.00M	132.40M	172.40M	107.20M	72.00M
Total Debt	678.50M	603.30M	672.20M	353.30M	318.50M
Total Liabilities	1.23B	1.12B	1.23B	927.20M	893.30M
Stockholders Equity	346.10M	558.10M	665.20M	553.00M	290.50M
Cash Flow
Free Cash Flow	68.10M	92.90M	62.60M	97.40M	50.20M
Operating Cash Flow	95.80M	123.90M	96.40M	128.60M	65.60M
Investing Cash Flow	-61.30M	-20.30M	-319.30M	-30.00M	-48.30M
Financing Cash Flow	3.60M	-147.00M	295.00M	-57.60M	-99.20M

Coats Group plc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 78.30
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:COA, the sentiment is Positive. The current price of 78.3 is above the 20-day moving average (MA) of 77.41, above the 50-day MA of 75.38, and below the 200-day MA of 86.10, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 54.68 is Neutral, neither overbought nor oversold. The STOCH value of 46.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:COA.

Coats Group plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSN	78 Outperform	£4.25B	15.79	7.71%	4.53%	15.42%	4.45%
BKG	74 Outperform	£3.76B	10.24	10.73%	1.70%	0.39%	-17.64%
COA	73 Outperform	£1.21B	14.98	17.76%	3.20%	4.70%	26.05%
VTY	71 Outperform	£2.01B	29.33	2.27%	―	6.04%	-66.96%
BTRW	64 Neutral	£6.57B	44.02	1.81%	2.39%	4.78%	-53.59%
BWY	64 Neutral	£3.35B	22.83	4.22%	1.48%	-11.63%	-31.81%
Sector *	61 Neutral	C$5.16B	10.72	18.94%	4.15%	5.08%	6.52%

Coats Group plc Corporate Events

Coats Group Appoints Wu Gang as Non-Executive Director

Coats Group plc has announced the appointment of Wu Gang as a Non-Executive Director, effective 1 July 2025. Wu Gang brings nearly 30 years of investment banking experience across Asia and Europe, having held significant roles at CITIC CLSA, ICBC International, Merrill Lynch, HSBC, and Goldman Sachs. His expertise in strategic and financial advisory is expected to strengthen Coats’ Board, enhancing its strategic direction and international reach.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group CEO Purchases Significant Shareholding

Coats Group plc announced a transaction involving the purchase of 150,000 ordinary shares by its CEO and Executive Director, David Paja. This transaction, conducted on the London Stock Exchange, reflects a significant investment in the company by its leadership, potentially signaling confidence in the company’s future performance and stability.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group CFO Acquires Shares, Signaling Confidence in Future Performance

Coats Group plc announced a transaction involving the purchase of ordinary shares by Hannah Nichols, the Chief Financial Officer and Executive Director. The transaction, which took place on the London Stock Exchange, involved the acquisition of 26,092 shares at a price of £0.762645 per share, amounting to a total of £19,898.93. This move reflects the company’s ongoing strategic decisions and may indicate confidence in its future performance.

The most recent analyst rating on (GB:COA) stock is a Buy with a £110.00 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group plc Successfully Passes All AGM Resolutions

Coats Group plc announced the successful passing of all resolutions at its Annual General Meeting held in London on 21 May 2025, with significant shareholder participation representing 86% of the issued share capital. The resolutions, which included ordinary and special resolutions, reflect the company’s strategic initiatives and governance practices, potentially impacting its operational and market positioning positively.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group Reports Revenue Growth and Strategic Exit from US Yarns

Coats Group plc reported a 4% increase in revenue for the first four months of 2025, driven by strong growth in its Apparel and Footwear segments. The company is exiting its low-margin US Yarns business to improve portfolio quality and margins, expecting net cash proceeds of $16 million from the sale. Despite uncertainties from US-led trade tariffs, Coats maintains a positive outlook for the year, with expectations of strong free cash flow and continued investment in growth initiatives.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group Reports Revenue Growth and Strategic Exit from US Yarns Business

Coats Group plc reported a 4% revenue increase for the first four months of 2025, driven by strong growth in its Apparel and Footwear segments. The company is exiting its low-margin US Yarns business to improve its portfolio quality and margins. Despite uncertainties from US-led trade tariffs, Coats remains confident in its resilient business model and expects strong cash flow generation and continued growth. The company is actively seeking acquisition opportunities to strengthen its portfolio further.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group plc Announces Change in Voting Rights Structure

Coats Group plc has announced a change in its voting rights structure following an acquisition or disposal by Aberdeen Group plc, which now holds less than 5% of the voting rights in Coats Group. This adjustment in holdings may influence the company’s governance dynamics and reflects a shift in stakeholder positions, potentially impacting future strategic decisions.

Coats Group PLC Sees Major Change in Shareholder Voting Rights

Coats Group PLC has announced a change in its major holdings, with Liontrust Investment Partners LLP reducing its voting rights from approximately 10% to just under 5%. This significant decrease in holdings could impact the company’s governance and decision-making processes, potentially influencing its strategic direction and stakeholder relations.

Coats Group’s Non-Executive Chair Acquires Shares, Signaling Confidence

Coats Group plc announced a transaction involving the purchase of ordinary shares by David Gosnell, the Non-Executive Chair. This transaction, conducted on the London Stock Exchange, involved the acquisition of 148,600 shares at a price of £0.67588 each, amounting to a total of £100,435.77. The purchase reflects a strategic move by the company’s leadership, potentially signaling confidence in the company’s future performance and stability, which may impact stakeholder perceptions positively.

Coats Group Exits US Yarns Business to Boost Profitability

Coats Group plc has announced its strategic decision to exit the US Yarns business within its Performance Materials division, following a review of its Americas Yarns operations. This move, which includes the closure of the Kings Mountain, North Carolina facility, is expected to enhance the company’s EBIT margins and allow it to focus on more profitable areas of its portfolio. The exit is anticipated to be completed by Q2, generating a modest cash inflow after closure costs, and reflects Coats’ strategy to streamline operations and concentrate on growth in other segments.