RBC Capital downgrades ConvaTec after share price strength
By Michele Maatouk
Date: Monday 09 Dec 2019
(Sharecast News) - RBC Capital Markets downgraded its stance on shares of medical products and technologies company ConvaTec to 'sector perform' from 'outperform' on Monday, cutting the price target to 197p from 210p following recent share price strength.
The bank noted that the stock us up 38% in the past six months and advised investors to take profits after a "strong" third quarter.
RBC said the company's third-quarter results drove outperformance of the shares from a low base, with the group's Q3 organic growth the highest in three years and all divisions showing good growth.
However, it noted that ConvaTec cautioned that the fourth quarter will be tougher.
"Tailwinds in Q3 (easy comps and distributor inventory movements) are not expected to repeat, while management expects that Q4 will see some impact from SKU rationalisation, destocking and ID division lumpiness," it said.
At 1040 GMT, the shares were down 1.2% at 190.05p.
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