RBC Capital upgrades Convatec to 'outperform'
By Michele Maatouk
Date: Thursday 21 Aug 2025
(Sharecast News) - RBC Capital Markets upgraded Convatec on Thursday to 'outperform' from 'sector perform' as it said the recent share price reaction was likely overdone and the current price is a buying opportunity ahead of solid underlying top line growth and mid-term margin development.
The bank noted the shares are down 20% since June peaks, reflecting news flow around the proposed reimbursement changes in the US.
"The shares now trade on 16.5x 2026E P/ E, towards the lower end of the 5-year range and below the 3-year average valuation premium to the peer group," it said.
"We adjust our forecasts for H1 results and our updated view on 2026 and 2027, as well as the recently announced $300m share buy-back programme, roll forwards our valuation and move our price target to 315p (from 320p)," it said.
"With risk-reward skewed clearly to the upside, further clarity on these reimbursement changes could prove a positive catalyst (expected Q4 2025)."
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