Coats Group plc (COA) AI Stock Analysis

• Market Cap: £1.30B
• Dividend Yield: 2.94%
• Average Volume (3M): 4.36M
• Price to Earnings (P/E): 16.2
• Beta (1Y): 1.05
• Revenue Growth: 4.70%
• EPS Growth: 26.05%
• Country: UK
• Employees: 16,042
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Apparel - Manufacturers
• EPS (TTM): 0.03
• Shares Outstanding: 1,597,810,400
• 10 Day Avg. Volume: 2,253,649
• 30 Day Avg. Volume: 4,356,118
• PEG Ratio: 4.87
• Price to Book (P/B): 1.82
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.38
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 0.33
• Enterprise Value/Gross Profit: 3.35
• Enterprise Value/Ebitda: 1.84
• 1Y Price Target: £121.67
• Price Target Upside: 47.84% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 75 Outperform
• Price Target: 87.00p ▲(5.71%Upside)

Coats Group plc's overall stock score is driven by solid financial performance and confidence from recent corporate events. The technical indicators suggest a neutral to slightly bullish outlook, while the valuation remains attractive with a reasonable P/E ratio and a good dividend yield. However, high leverage presents a risk that requires careful management.

Positive Factors

Financial Targets

Coats Group's new medium-term financial targets indicate a more resilient earnings growth profile than historically, offering further re-rating potential.

Profitability

Exiting the US Yarns business will increase Performance Materials margins to 8.2%, with potential for over 10% margins after cost savings.

Revenue Growth

Coats has delivered OCC revenue growth of 4% over the first four months of the year, capturing some of the disruption following Liberation Day.

Negative Factors

Manufacturing Tariffs

The group's Southeast Asian manufacturing footprint is currently facing high levels of tariffs.

Pricing Pressure

There is potential for pricing pressure down the apparel and footwear supply chain as brands look to minimize their own margin hit from tariffs.

Share Price Reaction

A lacklustre share price reaction to today's new financial targets is disappointing.

Coats Group plc Business Overview & Revenue Model

Company Description

Coats Group plc, together with its subsidiaries, manufactures and supplies industrial threads worldwide. The company provides apparel and footwear, and accessories threads for sport/athleisure, denim, women wear, menswear, children's wear, leather wear, workwear, footwear, and intimates and underwear under Epic, Dual Duty, Seamsoft, Nylbond, Gral, Gramax, Astra, Sylko, Knit, EcoVerde, Eloflex, and Drybond brands; zips, trims, and crafting's for use in zips, interlinings, reflective tapes, and crafting products under Opti, Signal, and Connect brands; and software solutions that enables supply chain productivity gains and enhances supply and facilitating compliance under Coats Digital, FastReactPlan, VisionPLM, GSDCost, Intellocut, and Intellobuy. It also offers performance materials comprising fire retardant and cut resistant threads and yarns for personal protection sectors under Firefly, FlamePro, and Armoren brands; composites for telecommunications and energy, automotive, and footwear sectors under Gotex, Synergex, Lattice, Ultrabloc, Aptan XU, Gral Binder, and Protos Ripcord brands; and performance threads and yarns for the automotive, and household and recreation industries, as well as other technical industrial applications under Gral, Helios, Gral Quilt, Protos Fil, Epic, Gramax, Admiral, and Neophil brands. The company was formerly known as Guinness Peat Group plc and changed its name to Coats Group plc in March 2015. Coats Group plc was incorporated in 1909 and is headquartered in Uxbridge, the United Kingdom.

How the Company Makes Money

Coats Group plc generates revenue primarily through the sale of its industrial threads and related products. The company's revenue streams are driven by its two main business segments: Apparel & Footwear and Performance Materials. In the Apparel & Footwear segment, Coats provides threads, zips, and trims used in the manufacturing of garments and shoes. The Performance Materials segment involves the sale of technical products used in a variety of industries such as automotive, telecommunications, and personal protection. Coats benefits from long-term relationships with key clients across the globe, leveraging its extensive distribution network and innovative product offerings to maintain its market position. Additionally, the company invests in research and development to improve product performance and sustainability, which enhances its competitive advantage and revenue potential.

Coats Group plc Financial Statement Overview

Summary

Coats Group plc shows solid financial performance with notable revenue growth and healthy operating margins. However, the high leverage reflected in the balance sheet poses potential risks, and the decrease in free cash flow indicates pressure on cash flow management.

Income Statement

Coats Group plc has demonstrated consistent revenue growth with a recent increase of 7.66% from 2023 to 2024. The gross profit margin is solid at 34.04%, indicating strong pricing power and cost control. However, the net profit margin is moderate at 5.34%, suggesting room for improvement in operating efficiency. EBIT and EBITDA margins of 13.31% and 18.54% respectively show healthy operational performance.

Balance Sheet

The company has a relatively high debt-to-equity ratio of 1.96, indicating significant leverage. Stockholders' equity decreased over the past year, affecting the equity ratio, which stands at 21.49%. Return on equity is moderate at 23.14%, suggesting efficient use of equity in generating profits, despite the high leverage.

Cash Flow

Free cash flow decreased by 26.71% from 2023 to 2024, indicating potential cash flow management issues. However, the operating cash flow to net income ratio is robust at 1.20, suggesting good cash generation relative to profit. The free cash flow to net income ratio of 0.85 further supports the company's ability to generate cash relative to its earnings.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.50B	1.39B	1.58B	1.50B	1.16B
Gross Profit	511.00M	483.30M	486.80M	484.30M	351.80M
EBITDA	278.20M	260.40M	233.30M	230.40M	155.40M
Net Income	80.10M	56.50M	94.90M	88.90M	42.20M
Balance Sheet
Total Assets	1.61B	1.71B	1.92B	1.51B	1.21B
Cash, Cash Equivalents and Short-Term Investments	146.00M	132.40M	172.40M	107.20M	72.00M
Total Debt	678.50M	603.30M	672.20M	353.30M	318.50M
Total Liabilities	1.23B	1.12B	1.23B	927.20M	893.30M
Stockholders Equity	346.10M	558.10M	665.20M	553.00M	290.50M
Cash Flow
Free Cash Flow	68.10M	92.90M	62.60M	97.40M	50.20M
Operating Cash Flow	95.80M	123.90M	96.40M	128.60M	65.60M
Investing Cash Flow	-61.30M	-20.30M	-319.30M	-30.00M	-48.30M
Financing Cash Flow	3.60M	-147.00M	295.00M	-57.60M	-99.20M

Coats Group plc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 82.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:COA, the sentiment is Positive. The current price of 82.3 is above the 20-day moving average (MA) of 79.27, above the 50-day MA of 77.81, and below the 200-day MA of 85.00, indicating a neutral trend. The MACD of 1.30 indicates Negative momentum. The RSI at 60.90 is Neutral, neither overbought nor oversold. The STOCH value of 79.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:COA.

Coats Group plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COA	75 Outperform	£1.30B	16.17	17.76%	2.94%	4.70%	26.05%
BKG	74 Outperform	£3.59B	9.89	10.73%	1.79%	0.39%	-17.64%
VTY	71 Outperform	£1.95B	28.16	2.27%	―	6.04%	-66.96%
PSN	71 Outperform	£3.88B	14.48	7.71%	6.61%	15.42%	4.45%
Sector *	66 Neutral	€8.42B	15.70	8.46%	3.22%	4.03%	-26.96%
BWY	64 Neutral	£3.07B	20.90	4.22%	1.62%	-11.63%	-31.81%
BTRW	58 Neutral	£5.92B	39.72	1.81%	2.65%	4.78%	-53.59%

Coats Group plc Corporate Events

Coats Group plc Announces Change in Major Holdings

Coats Group plc has announced a change in major holdings, with FIL Limited acquiring a significant increase in voting rights, now holding over 10% of the total. This acquisition indicates a strengthened influence of FIL Limited within the company, potentially impacting future strategic decisions and shareholder dynamics.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group Appoints Wu Gang as Non-Executive Director

Coats Group plc has announced the appointment of Wu Gang as a Non-Executive Director, effective 1 July 2025. Wu Gang brings nearly 30 years of investment banking experience across Asia and Europe, having held significant roles at CITIC CLSA, ICBC International, Merrill Lynch, HSBC, and Goldman Sachs. His expertise in strategic and financial advisory is expected to strengthen Coats’ Board, enhancing its strategic direction and international reach.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group CEO Purchases Significant Shareholding

Coats Group plc announced a transaction involving the purchase of 150,000 ordinary shares by its CEO and Executive Director, David Paja. This transaction, conducted on the London Stock Exchange, reflects a significant investment in the company by its leadership, potentially signaling confidence in the company’s future performance and stability.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group CFO Acquires Shares, Signaling Confidence in Future Performance

Coats Group plc announced a transaction involving the purchase of ordinary shares by Hannah Nichols, the Chief Financial Officer and Executive Director. The transaction, which took place on the London Stock Exchange, involved the acquisition of 26,092 shares at a price of £0.762645 per share, amounting to a total of £19,898.93. This move reflects the company’s ongoing strategic decisions and may indicate confidence in its future performance.

The most recent analyst rating on (GB:COA) stock is a Buy with a £110.00 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group plc Successfully Passes All AGM Resolutions

Coats Group plc announced the successful passing of all resolutions at its Annual General Meeting held in London on 21 May 2025, with significant shareholder participation representing 86% of the issued share capital. The resolutions, which included ordinary and special resolutions, reflect the company’s strategic initiatives and governance practices, potentially impacting its operational and market positioning positively.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group Reports Revenue Growth and Strategic Exit from US Yarns

Coats Group plc reported a 4% increase in revenue for the first four months of 2025, driven by strong growth in its Apparel and Footwear segments. The company is exiting its low-margin US Yarns business to improve portfolio quality and margins, expecting net cash proceeds of $16 million from the sale. Despite uncertainties from US-led trade tariffs, Coats maintains a positive outlook for the year, with expectations of strong free cash flow and continued investment in growth initiatives.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group Reports Revenue Growth and Strategic Exit from US Yarns Business

Coats Group plc reported a 4% revenue increase for the first four months of 2025, driven by strong growth in its Apparel and Footwear segments. The company is exiting its low-margin US Yarns business to improve its portfolio quality and margins. Despite uncertainties from US-led trade tariffs, Coats remains confident in its resilient business model and expects strong cash flow generation and continued growth. The company is actively seeking acquisition opportunities to strengthen its portfolio further.

The most recent analyst rating on (GB:COA) stock is a Hold with a £0.80 price target. To see the full list of analyst forecasts on Coats Group plc stock, see the GB:COA Stock Forecast page.

Coats Group plc Announces Change in Voting Rights Structure

Coats Group plc has announced a change in its voting rights structure following an acquisition or disposal by Aberdeen Group plc, which now holds less than 5% of the voting rights in Coats Group. This adjustment in holdings may influence the company’s governance dynamics and reflects a shift in stakeholder positions, potentially impacting future strategic decisions.

Coats Group PLC Sees Major Change in Shareholder Voting Rights

Coats Group PLC has announced a change in its major holdings, with Liontrust Investment Partners LLP reducing its voting rights from approximately 10% to just under 5%. This significant decrease in holdings could impact the company’s governance and decision-making processes, potentially influencing its strategic direction and stakeholder relations.