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ConvaTec
(LSE:CTEC)
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Rating:67Neutral
Price Target:
232.00 p
▲(0.87% Upside)
Action:Reiterated
Date:02/26/26
The score is driven primarily by solid underlying financial performance (growth, improving operating margins, positive free cash flow) and supportive guidance for continued growth and margin expansion. This is tempered by increased leverage and notable operational/regulatory risks flagged on the call, while valuation looks expensive and technicals appear near overbought despite an uptrend.
Positive Factors
Consistent organic revenue growth
Sustained organic growth across wound, ostomy, continence and infusion care signals recurring demand and pricing/reimbursement resilience in chronic-care consumables. Management’s 2026 guidance and a raised 2027 ambition (6–8%) provide multi-year revenue visibility that supports investment and cash generation.
Negative Factors
Rising leverage and reduced financial flexibility
Higher leverage raises sensitivity to earnings volatility and interest-rate moves, constraining strategic optionality. With working capital increases and rising growth CapEx, elevated net debt/EBITDA limits margin for error on execution or reimbursement shocks and weakens balance sheet resilience over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent organic revenue growth
Sustained organic growth across wound, ostomy, continence and infusion care signals recurring demand and pricing/reimbursement resilience in chronic-care consumables. Management’s 2026 guidance and a raised 2027 ambition (6–8%) provide multi-year revenue visibility that supports investment and cash generation.
Read all positive factors
ConvaTec (CTEC) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£4.19B
Dividend Yield2.11%
Average Volume (3M)6.27M
Price to Earnings (P/E)32.6
Beta (1Y)1.07
Revenue Growth3.29%
EPS Growth-10.58%
CountryUK
Employees10,489
SectorHealthcare
Sector Strength45
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)0.09
Shares Outstanding1,954,852,000
10 Day Avg. Volume5,278,857
30 Day Avg. Volume6,266,139
Financial Highlights & Ratios
PEG Ratio-7.33
Price to Book (P/B)4.36
Price to Sales (P/S)2.66
P/FCF Ratio19.37
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£301.56Price Target Upside31.11% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)0.2
Revenue Forecast (FY)£2.57B
ConvaTec Business Overview & Revenue Model
Company Description
ConvaTec Group Plc operates as a global medical technology company, specializing in the creation, production, and worldwide distribution of a diverse array of healthcare products. Its offerings span critical areas, including advanced wound care, w...
How the Company Makes Money
ConvaTec makes money primarily by selling medical consumables and related care products that are used repeatedly over time in chronic care pathways. Its key revenue streams come from: (1) Wound Care: advanced wound dressings and skin protection pr...
ConvaTec Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The earnings call conveyed a generally positive financial and operational performance: strong organic growth excluding the InnovaMatrix disruption, margin expansion, double-digit EPS growth, robust cash generation, increased growth CapEx and an active return-of-capital program. Key strategic strengths include a broad-based pipeline, improving product launches (notably Infusion Care), and clear 2026 and 2027 targets. However, material near-term challenges temper the outlook: a severe CMS-driven price cut and $72 million impairment for InnovaMatrix, an FDA warning letter on complaints/CAPA processes, inflationary pressure, and execution/capacity risks that management is addressing. Overall, the positives (growth, margins, cash, pipeline, capital allocation) substantially outweigh the negatives, though the operational and regulatory issues warrant active mitigation.Positive Updates
Consistent Organic Revenue Growth
Five consecutive years of organic revenue growth within target range; 2025 organic revenue growth of 6.4% excluding InnovaMatrix, and company note of five years >5% and three years >6% (ex-InnovaMatrix). 2026 guidance: 5%–7% organic growth (ex-InnovaMatrix) and long-term target of 6%–8% p.a. from 2027.
Negative Updates
InnovaMatrix Sales Collapse and Impairment
InnovaMatrix sales decreased by $30 million to $69 million in 2025 with H1 down ~13% and H2 down ~44%. CMS price rate introduced on 1 Jan 2026 (~$127 per cm²) represented an ~80% price reduction for InnovaMatrix. Company recorded a non-cash impairment of $72 million (~20% of acquisition consideration) and expects InnovaMatrix to be a ~2% group revenue headwind in 2026 (sales guided to ~ $20 million, H2 weighted).
Read all updates
Q4-2025 Updates
Positive
Negative
Consistent Organic Revenue Growth
Five consecutive years of organic revenue growth within target range; 2025 organic revenue growth of 6.4% excluding InnovaMatrix, and company note of five years >5% and three years >6% (ex-InnovaMatrix). 2026 guidance: 5%–7% organic growth (ex-InnovaMatrix) and long-term target of 6%–8% p.a. from 2027.
Read all positive updates
Company Guidance
Management guidance for 2026 reiterated organic group revenue growth of 5–7% excluding InnovaMatrix (which is expected to contribute ~ $20m in 2026, strongly H2‑weighted and representing roughly a 2% group revenue headwind), with operating margin of at least 23% and another year of double‑digit EPS growth; cash generation is expected to be strong with free cash‑flow‑to‑equity conversion targeted around 100%, operational CapEx roughly 2.5% of sales and growth CapEx increasing above 2025’s $121m to fund capacity, while leverage is managed at ~2x net debt/EBITDA and dividends are to grow in line with profits. Looking beyond 2026, the company raised its medium‑term ambition to 6–8% organic growth from 2027 with a mid‑20s operating margin, sustained double‑digit EPS growth and continued strong FCF conversion, building on 2025 results of 6.4% organic growth (ex‑InnovaMatrix), 22.3% operating margin, 16% EPS growth, $362m FCF to equity (101% conversion), a $300m buyback and a $72m InnovaMatrix impairment.ConvaTec Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.49B | 2.29B | 2.14B | 2.07B | 2.04B |
| Gross Profit | 1.37B | 1.28B | 1.20B | 1.12B | 1.12B |
| EBITDA | 644.24M | 540.20M | 455.50M | 419.10M | 405.40M |
| Net Income | 178.67M | 190.50M | 130.30M | 62.90M | 117.60M |
Balance Sheet | |||||
| Total Assets | 3.78B | 3.52B | 3.71B | 3.59B | 3.67B |
| Cash, Cash Equivalents and Short-Term Investments | 75.03M | 64.70M | 98.30M | 145.80M | 463.40M |
| Total Debt | 1.52B | 1.20B | 1.31B | 1.30B | 1.44B |
| Total Liabilities | 2.26B | 1.83B | 2.02B | 1.98B | 1.98B |
| Stockholders Equity | 1.52B | 1.69B | 1.69B | 1.61B | 1.69B |
Cash Flow | |||||
| Free Cash Flow | 342.03M | 274.10M | 238.20M | 137.50M | 211.80M |
| Operating Cash Flow | 479.86M | 396.20M | 367.40M | 281.70M | 305.90M |
| Investing Cash Flow | -212.36M | -160.80M | -285.70M | -348.30M | -206.50M |
| Financing Cash Flow | -263.41M | -263.80M | -124.00M | -237.10M | -199.90M |
ConvaTec Technical Analysis
Neutral
230.00
Price Trends
209.69
Positive
218.50
Negative
225.77
Negative
Market Momentum
0.78
Negative
57.99
Neutral
83.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:CTEC, the sentiment is Neutral. The current price of 230 is above the 20-day moving average (MA) of 204.06, above the 50-day MA of 209.69, and above the 200-day MA of 225.77, indicating a neutral trend. The MACD of 0.78 indicates Negative momentum. The RSI at 57.99 is Neutral, neither overbought nor oversold. The STOCH value of 83.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:CTEC.
ConvaTec Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | £191.99M | 24.27 | 23.64% | 3.48% | 13.71% | 27.65% | |
70 Outperform | £9.21B | 19.53 | 11.79% | 2.35% | 2.84% | 47.82% | |
67 Neutral | £4.19B | 32.60 | 10.53% | 2.11% | 3.29% | -10.58% | |
60 Neutral | £811.71M | 53.32 | 5.35% | 0.67% | 4.41% | -8.04% | |
58 Neutral | £605.93M | 60.61 | 3.87% | 1.25% | 28.96% | 39.58% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
GB:CTEC
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215.00
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ConvaTec Corporate Events
Other
Convatec CEO and CFO Boost Stakes with Share Purchases
Positive
May 27, 2026
Convatec Group has disclosed director share dealings, with chief executive Jonny Mason purchasing 50,000 ordinary shares and chief financial officer Fiona Ryder buying 24,993 shares in the company. The purchases, executed on 26 May 2026 on the Lon...
Executive/Board ChangesStock BuybackDividendsShareholder Meetings
Convatec AGM backs all resolutions as investors flag concern on pay
Neutral
May 21, 2026
Convatec shareholders approved all resolutions at the company’s annual general meeting in London, including the 2025 accounts, a dividend, auditor appointment and authorities for share issuance, buybacks and shorter notice for general meetin...
Business Operations and StrategyFinancial Disclosures
ConvaTec Delivers Solid Start to 2026 and Reaffirms Growth Targets
Positive
May 21, 2026
ConvaTec reported a solid start to 2026, with year-to-date organic revenue growth of 4.8% excluding InnovaMatrix and broad-based gains across all major categories, supported by successful product launches such as ConvaFoam, Esteem Body and GentleC...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Convatec Director Departs After Driving Innovation-Led Turnaround
Positive
Apr 13, 2026
Convatec Group has announced that Professor Constantin Coussios OBE will step down as a non-executive director on 30 April 2026 following his appointment as Pro-Vice-Chancellor for Innovation at the University of Oxford. During his tenure since 20...
Business Operations and StrategyFinancial Disclosures
Convatec launches ‘Accelerate’ strategy with upgraded growth and margin targets
Positive
Apr 9, 2026
Convatec has unveiled a new ‘Accelerate’ strategy at its Capital Markets Day, positioning it as the next phase of growth following its previous FISBE programme, which helped establish the company as a chronic care leader. The framework...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.