Analyst David Farrell of Jefferies maintained a Buy rating on Coats Group plc (COA – Research Report), retaining the price target of p130.00.
David Farrell’s rating is based on Coats Group plc’s strategic decision to exit the US Yarns business, which is expected to enhance the company’s profitability. By discontinuing this segment, Coats Group aims to improve its Performance Materials division’s margins significantly, potentially reaching over 10% after realizing cost savings from plant closures.
Despite the immediate challenges posed by high tariffs on its Southeast Asian operations, the exit from the US Yarns business is viewed as a positive long-term move. This strategic shift is anticipated to streamline operations and focus resources on more profitable areas, thereby justifying the Buy rating.
In another report released on March 21, RBC Capital also maintained a Buy rating on the stock with a p125.00 price target.
Based on the recent corporate insider activity of 7 insiders, corporate insider sentiment is neutral on the stock.