Coats Group plc (GB:COA)
LSE:COA
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Coats Group plc
(LSE:COA)
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Rating:80Outperform
Price Target:
91.00 p
▲(8.40% Upside)
Action:ReiteratedDate:03/06/26
The score is driven primarily by strong financial performance (step-change improvement in cash flow and a strengthened balance sheet in the provided statements) and supportive earnings-call guidance (upgraded medium-term targets and continued margin/FCF focus). Valuation further boosts the score due to a low P/E and a reasonable dividend yield. Technicals are positive with price above key moving averages and healthy momentum.
Positive Factors
Free cash flow generation
Record 2025 free cash flow reflects structurally low capital intensity, higher margins and disciplined working capital. Durable FCF gives the company capacity to pay dividends, fund deleveraging, organic investment and targeted M&A without relying on volatile equity markets.
Negative Factors
Elevated post‑acquisition leverage
OrthoLite consideration materially increased gross debt and finance costs, leaving temporary elevated leverage that limits near‑term financial flexibility. Durable improvement depends on timely realization of synergies and disciplined deleveraging by management as guided.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
Record 2025 free cash flow reflects structurally low capital intensity, higher margins and disciplined working capital. Durable FCF gives the company capacity to pay dividends, fund deleveraging, organic investment and targeted M&A without relying on volatile equity markets.
Read all positive factors
Coats Group plc (COA) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£1.61B
Dividend Yield2.92%
Average Volume (3M)3.81M
Price to Earnings (P/E)18.9
Beta (1Y)1.06
Revenue Growth0.47%
EPS Growth-14.06%
CountryUK
Employees16,042
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Manufacturers
Share Statistics
EPS (TTM)0.03
Shares Outstanding1,917,372,400
10 Day Avg. Volume3,003,632
30 Day Avg. Volume3,812,491
Financial Highlights & Ratios
PEG Ratio0.90
Price to Book (P/B)2.75
Price to Sales (P/S)1.33
P/FCF Ratio10.03
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£128.33Price Target Upside52.86% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)0.1
Revenue Forecast (FY)£1.75B
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...
How the Company Makes Money
Coats makes money primarily by manufacturing and selling industrial threads, yarns and other textile-related products to customers in apparel and footwear supply chains, and by selling engineered/structural components used in finished goods (for e...
Coats Group plc Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive outlook: the group delivered resilient top-line performance that outperformed weaker end markets, expanded margins (EBIT margin +80 bps to 19.8%), produced a record $160 million free cash flow, executed strategic M&A (OrthoLite) with identified synergies, and upgraded medium-term targets (higher margin and $1 billion 5-year free cash flow). Headwinds included temporary higher leverage (2.2x) from the OrthoLite acquisition, increased finance and acquisition-related costs, and end-market softness in footwear with late-year destocking and tariff/geopolitical uncertainty. Overall, the company emphasized strong cash generation, margin progress, sustainability leadership and clear plans to deleverage and realize synergies, with manageable near-term risks.Positive Updates
Record Free Cash Flow
Generated $160 million of free cash flow pre-dividends in 2025 — described as more than the free cash flow delivered in the prior 10 years combined — reflecting high margins, low capital intensity and timing benefits from the OrthoLite acquisition.
Negative Updates
Macroeconomic, Tariff and Geopolitical Uncertainty
Macroeconomic headwinds and tariff uncertainty from Q2 onward pressured markets; management flagged potential disruption from the conflict in the Middle East as an unresolved risk that could affect demand and supply chains.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Free Cash Flow
Generated $160 million of free cash flow pre-dividends in 2025 — described as more than the free cash flow delivered in the prior 10 years combined — reflecting high margins, low capital intensity and timing benefits from the OrthoLite acquisition.
Read all positive updates
Company Guidance
Management guided that after a 2025 baseline of $1.46bn revenue, $290m EBIT (19.8% margin), $160m free cash flow (pre‑dividends), adjusted EPS $0.093 and year‑end net debt of $815m (pro‑forma leverage 2.2x), they expect leverage to fall below 2.0x by end‑2026; working capital to normalize from 11% of sales in 2025 to ~12% in 2026; capex to increase from $32m to $40–45m (including OrthoLite); OrthoLite (EV $770m) to deliver $20m of joint cost synergies by 2028 with $5m in 2026 and it contributed $11m operating profit in the two months post‑acquisition (acquisition cash flows ~$793m); medium‑term targets were upgraded to >5% revenue CAGR through the cycle (underlying market ~3% with 100–200bps outperformance), group EBIT margin 21–23% (up 200bps), cumulative free cash flow of $1bn over five years (up from $750m) with FCF now defined after exceptionals, a maintained 1–2x EBITDA leverage target range, an expected slight reduction in the effective tax rate over the medium term, and a continued priority on deleveraging, disciplined M&A, organic growth investment, a progressive dividend and delivering strong double‑digit (>10%) EPS CAGR post M&A/share buybacks.Coats Group plc Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
81
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.50B | 1.50B | 1.39B | 1.58B | 1.45B |
| Gross Profit | 558.07M | 511.00M | 483.30M | 486.80M | 461.60M |
| EBITDA | 295.88M | 278.20M | 260.40M | 233.30M | 230.40M |
| Net Income | 105.57M | 80.10M | 56.50M | -14.70M | 88.90M |
Balance Sheet | |||||
| Total Assets | 2.59B | 1.61B | 1.71B | 1.92B | 1.51B |
| Cash, Cash Equivalents and Short-Term Investments | 232.08M | 146.00M | 132.40M | 172.40M | 107.20M |
| Total Debt | 1.14B | 678.50M | 603.30M | 672.20M | 353.30M |
| Total Liabilities | 1.82B | 1.23B | 1.12B | 1.24B | 927.20M |
| Stockholders Equity | 722.76M | 346.10M | 558.10M | 616.50M | 553.00M |
Cash Flow | |||||
| Free Cash Flow | 198.38M | 68.10M | 92.90M | 62.60M | 97.40M |
| Operating Cash Flow | 231.15M | 95.80M | 123.90M | 96.40M | 128.60M |
| Investing Cash Flow | -580.33M | -61.30M | -20.30M | -319.30M | -30.00M |
| Financing Cash Flow | 435.75M | 3.60M | -147.00M | 295.00M | -57.60M |
Coats Group plc Technical Analysis
Positive
83.95
Price Trends
86.89
Negative
84.33
Negative
81.34
Positive
Market Momentum
-1.95
Positive
49.82
Neutral
49.93
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 83.95 is above the 20-day moving average (MA) of 83.56, below the 50-day MA of 86.89, and above the 200-day MA of 81.34, indicating a neutral trend. The MACD of -1.95 indicates Positive momentum. The RSI at 49.82 is Neutral, neither overbought nor oversold. The STOCH value of 49.93 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | £1.61B | 18.85 | 18.19% | 2.92% | 0.47% | -14.06% | |
70 Outperform | £15.27B | 17.45 | 52.86% | 1.80% | 9.74% | 0.92% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | £7.37B | 298.74 | 0.69% | 1.18% | 14.13% | -96.12% | |
55 Neutral | £4.08B | -40.23 | -2.99% | ― | -9.44% | -170.53% | |
52 Neutral | £257.99M | -0.84 | -111.93% | ― | -14.89% | 12.08% | |
41 Neutral | £267.98M | -3.32 | -9999.00% | ― | -65.42% | 27.73% |
* Consumer Cyclical Sector Average
GB:COA
Coats Group plc
83.95
17.92
27.13%
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216.00
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-13.60%
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1,139.00
511.20
81.43%
GB:MKS
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364.05
2.01
0.56%
GB:NXT
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13,315.00
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27.08%
GB:DEBS
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-2.85
-13.83%
Coats Group plc Corporate Events
Business Operations and StrategyExecutive/Board Changes
Coats ties CEO and CFO long-term incentives to growth, cash and sustainability targets
Positive
Mar 30, 2026
Coats Group plc has granted nil-cost share options to its chief executive, David Paja, over 1,573,081 ordinary shares and to its chief financial officer, Hannah Nichols, over 849,573 ordinary shares under its 2026 Long Term Incentive Plan. The awa...
Executive/Board Changes
Coats Grants Deferred Bonus Share Awards to CEO and CFO
Neutral
Mar 17, 2026
Coats Group plc has granted nil‑cost share options to Chief Executive Officer David Paja and Chief Financial Officer Hannah Nichols under its Deferred Annual Bonus Plan, representing a portion of their bonuses for the year ended 31 December ...
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and ComplianceShareholder Meetings
Coats Group Publishes 2025 Annual Report and Sets AGM Document Timetable
Positive
Mar 12, 2026
Coats Group plc has published its Annual Financial Report for the year ended 31 December 2025 on its website, detailing the company’s performance over a year in which it generated $1.5 billion in revenue as a leading Tier 2 supplier to the g...
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Coats Group lifts margins, cash and targets after transformational 2025
Positive
Mar 5, 2026
Coats Group reported 2025 revenue of $1.47 billion, flat on an organic basis but ahead of declining apparel and footwear markets, while raising its operating margin to 19.8% through pricing discipline, cost controls and portfolio changes. The comp...
Executive/Board ChangesRegulatory Filings and Compliance
Coats Group Notes Change in External Directorship of Board Member
Neutral
Feb 6, 2026
Coats Group plc has announced a change relating to one of its Non-Executive Directors, confirming that Jakob Sigurdsson has stepped down from his separate role as an Executive Director of Victrex plc. The notification, made in line with UK listing...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.