Kepler Cheuvreux initiated coverage of ConvaTec Group PLC on Thursday with a Buy rating and a 286 pence price target, citing an expected 7% growth trajectory and margin expansion into the mid-20% range.
The brokerage’s bullish stance follows ConvaTec’s shares, which traded 0.4% higher at 228.4 pence, lagging the FTSE 250’s 0.6% gain. Kepler’s investment thesis centers on the company’s operating performance normalization after the InnovaMatrix reset, with clearer visibility into sales and capital expenditure anticipated from fiscal 2027 onward.
Analysts project low-teens compound annual growth in earnings per share, supported by stronger free-cash-flow generation. Margins are expected to improve as restructuring efforts take hold, aligning with Kepler’s view that the market remains overly focused on a perceived recovery phase rather than execution-driven execution improvements.
ConvaTec, listed on the FTSE 250, has yet to fully reflect these operational upgrades in its valuation, according to Kepler.
