Jefferies initiated coverage of medical products maker ConvaTec on Tuesday with a ‘buy’ rating and 300p price target as it expands its chronic care coverage alongside Coloplast.
“Our stance is supported by a proprietary analysis of NHS chronic care data,” it said. “ConvaTec has made significant progress on its strategy; hence is the only EU Medtech stock up year to date.”
Jefferies said ConvaTec is well-positioned to deliver towards the upper end of its medium-term organic sales growth guidance range of 4% to 6%, given the ramp-up in commercial activities, execution improvement and Covid impact normalisation.
The bank also sees scope for margin expansion above consensus.
It said competitive risk remains high as other big players (eg Coloplast) are also driving next wave of innovations, which will likely raise the bar higher, but Jefferies believes ConvaTec is poised to continue to gain share.
