Aisyah Noor, an analyst from Morgan Stanley, maintained the Buy rating on ConvaTec. The associated price target is p303.00.
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Aisyah Noor has given her Buy rating due to a combination of factors surrounding ConvaTec’s recent strategic decisions and financial outlook. The company announced a significant share buyback program, intending to repurchase up to $300 million of its own shares by the end of 2025. This move is aligned with ConvaTec’s capital allocation strategy and is expected to enhance shareholder value by being accretive to earnings per share.
Furthermore, the buyback is seen as a positive signal of ConvaTec’s confidence in its free cash flow generation, particularly as it anticipates stronger cash flows in the latter half of the fiscal year. Despite a recent drop in share price, the company’s reiteration of its fiscal year 2025 guidance suggests stability and potential for recovery. These factors, combined with the company’s leverage management and remaining capital headroom, underpin Aisyah Noor’s optimistic outlook on ConvaTec’s stock.