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ConvaTec
(LSE:CTEC)
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Rating:70Outperform
Price Target:
252.00 p
▲(16.67% Upside)
Action:Upgraded
Date:08/05/26
The score is driven primarily by solid underlying financial performance (revenue growth and improving operating margins with positive free cash flow), but tempered by higher leverage and only moderate cash conversion. Technicals are supportive with an established uptrend and healthy momentum. Valuation is the main constraint due to a high P/E, while the earnings call was broadly constructive (reiterated guidance and capital returns) despite notable setbacks from InnovaMatrix and ongoing regulatory remediation risk.
Positive Factors
Recurring consumables & diversified categories
ConvaTec's core business is built on recurring consumables across four clinical categories (wound, ostomy, continence, infusion). That mix creates predictable repeat demand supported by reimbursement and clinical pathways, underpinning durable revenue visibility, stable cash flow and resilience to short-term volume swings.
Negative Factors
Elevated leverage
Leverage has increased materially, reducing financial flexibility and raising sensitivity to earnings or rate shocks. Even with management targets to reduce leverage, higher debt constrains strategic optionality (M&A, aggressive buybacks) and increases refinancing and interest risk over the medium term if earnings or cash flow underperform.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring consumables & diversified categories
ConvaTec's core business is built on recurring consumables across four clinical categories (wound, ostomy, continence, infusion). That mix creates predictable repeat demand supported by reimbursement and clinical pathways, underpinning durable revenue visibility, stable cash flow and resilience to short-term volume swings.
Read all positive factors
ConvaTec (CTEC) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£4.37B
Dividend Yield2.4%
Average Volume (3M)6.27M
Price to Earnings (P/E)34.6
Beta (1Y)1.13
Revenue Growth3.29%
EPS Growth-10.58%
CountryUK
Employees10,910
SectorHealthcare
Sector Strength45
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)0.06
Shares Outstanding1,954,852,000
10 Day Avg. Volume5,278,857
30 Day Avg. Volume6,266,139
Financial Highlights & Ratios
PEG Ratio-7.33
Price to Book (P/B)4.36
Price to Sales (P/S)2.66
P/FCF Ratio19.37
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£301.40Price Target Upside39.54% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
EPS Forecast (FY)0.2
Revenue Forecast (FY)£2.56B
ConvaTec Business Overview & Revenue Model
Company Description
ConvaTec Group Plc operates as a global medical technology company, specializing in the creation, production, and worldwide distribution of a diverse array of healthcare products. Its offerings span critical areas, including advanced wound care, w...
How the Company Makes Money
ConvaTec makes money primarily by selling medical consumables and related care products that are used repeatedly over time in chronic care pathways. Its key revenue streams come from: (1) Wound Care: advanced wound dressings and skin protection pr...
ConvaTec Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 23, 2027
Earnings Call Sentiment Positive
The call conveyed an upbeat, constructive tone: management confirmed they are on track for FY '26 targets (revenue growth, at least 23% operating margin, and continued double‑digit EPS growth), announced a USD 200m buyback and highlighted robust Infusion Care momentum, multiple product launches with strong clinical evidence (notably ConvaNiox) and clear CapEx to support long-term growth. Key challenges include the disappointing InnovaMatrix performance and impairment, softer wound care trading in parts of H1, H1 cash timing pressures, currency headwinds and a multi-year FDA remediation program. On balance, the positive execution on strategy, operational productivity, financing actions and high-confidence Infusion Care order visibility outweigh the near-term setbacks.Positive Updates
Organic Revenue Growth (ex. InnovaMatrix)
Organic revenue growth excluding InnovaMatrix was 5% in H1 2026, in line with expectations and demonstrating broad-based growth across the business.
Negative Updates
InnovaMatrix Sales Collapse and Impairment
InnovaMatrix sales fell by USD 37m YoY to USD 2.5m in H1; company now forecasts full-year 2026 revenue of USD 5m–10m for InnovaMatrix (H1 headwind ~3% to group revenue, FY headwind ~2.5%, H2 headwind ~2%). A non-cash impairment of USD 69m was recorded. Management expects InnovaMatrix to be small going forward and breakeven at ~USD 10m of revenue.
Read all updates
Q2-2026 Updates
Positive
Negative
Organic Revenue Growth (ex. InnovaMatrix)
Organic revenue growth excluding InnovaMatrix was 5% in H1 2026, in line with expectations and demonstrating broad-based growth across the business.
Read all positive updates
Company Guidance
Convatec reiterated FY‑26 and medium‑term guidance: organic revenue growth for H2 narrowed to 6–8% (with group mid‑term growth target 6–8% p.a. from 2027), Infusion Care expected to be double‑digit in H2 (high‑single‑digit for FY‑26), and operating margin at least 23% for FY‑26 (inclusive of ~80bps InnovaMatrix and ~40bps FX headwinds) with H2 around mid‑20s (~25%) and mid‑20s thereafter; management is “on track” for double‑digit EPS growth (H1 EPS +6%) and targets double‑digit EPS annually from 2027, ~100% free‑cash‑flow‑to‑equity conversion for the year, a $200m share buyback to complete by year‑end, year‑end leverage ~2x EBITDA (H1 2.3x), continued growth CapEx (c.$90m increase focused on Infusion Care) plus operational CapEx ~2.5% of revenue, and InnovaMatrix now expected $5–10m for FY‑26 (H1 sales $2.5m, -$37m y/y) with a $69m non‑cash impairment.ConvaTec Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.49B | 2.49B | 2.29B | 2.14B | 2.07B | 2.04B |
| Gross Profit | 1.37B | 1.37B | 1.28B | 1.20B | 1.12B | 1.12B |
| EBITDA | 626.83M | 644.24M | 540.20M | 455.50M | 419.10M | 405.40M |
| Net Income | 124.09M | 178.67M | 190.50M | 130.30M | 62.90M | 117.60M |
Balance Sheet | ||||||
| Total Assets | 3.81B | 3.78B | 3.52B | 3.71B | 3.59B | 3.67B |
| Cash, Cash Equivalents and Short-Term Investments | 99.51M | 75.03M | 64.70M | 98.30M | 145.80M | 463.40M |
| Total Debt | 1.75B | 1.52B | 1.20B | 1.31B | 1.30B | 1.44B |
| Total Liabilities | 2.37B | 2.26B | 1.83B | 2.02B | 1.98B | 1.98B |
| Stockholders Equity | 1.44B | 1.52B | 1.69B | 1.69B | 1.61B | 1.69B |
Cash Flow | ||||||
| Free Cash Flow | 191.31M | 342.03M | 274.10M | 238.20M | 137.50M | 211.80M |
| Operating Cash Flow | 382.41M | 479.86M | 396.20M | 367.40M | 281.70M | 305.90M |
| Investing Cash Flow | -250.15M | -212.36M | -160.80M | -285.70M | -348.30M | -206.50M |
| Financing Cash Flow | -137.66M | -263.41M | -263.80M | -124.00M | -237.10M | -199.90M |
ConvaTec Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | £204.47M | 25.85 | 23.64% | 3.16% | 13.71% | 27.65% | |
70 Outperform | £4.37B | 34.56 | 8.40% | 2.49% | 3.29% | -10.58% | |
68 Neutral | £9.73B | 21.11 | 12.25% | 2.55% | 2.84% | 47.82% | |
63 Neutral | £605.93M | 60.61 | 3.87% | 1.68% | 28.96% | 39.58% | |
60 Neutral | £856.90M | 56.91 | 5.35% | 0.71% | 4.41% | -8.04% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
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ConvaTec Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
ConvaTec Corrects Dividend Figure as It Reaffirms 2026 Guidance and Launches $200m Buyback
Positive
Aug 4, 2026
ConvaTec has corrected a minor error in its interim dividend disclosure, confirming an H1 2026 dividend of 2.166 cents per share, up 15% year on year, while reporting steady underlying performance across its chronic care segments despite specific ...
Business Operations and StrategyStock Buyback
Convatec Launches $200 Million Share Buyback Programme
Positive
Aug 4, 2026
Convatec Group, a FTSE 100 medical technology company specialising in chronic care solutions such as advanced wound, ostomy, continence and infusion care, operates in around 90 countries and generated revenues above $2 billion in 2025. The group t...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
ConvaTec Delivers Broad-Based H1 Growth, Boosts Dividend and Launches $200m Buyback
Positive
Aug 4, 2026
ConvaTec reported first-half 2026 revenue of $1,232 million, up 4.4% year-on-year, with organic growth of 5.0% excluding InnovaMatrix and adjusted operating profit rising 3.9% to $262 million, despite a $69 million non-cash impairment tied to reim...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Convatec sets CFO succession and appoints new audit leader as earnings guidance holds
Positive
Jul 15, 2026
Convatec has announced a planned succession in its finance leadership, with Chief Financial Officer Fiona Ryder set to step down once a successor is appointed after nearly five years contributing to the company’s turnaround. Ryder has led ke...
Other
Convatec CEO and CFO Boost Stakes with Share Purchases
Positive
May 27, 2026
Convatec Group has disclosed director share dealings, with chief executive Jonny Mason purchasing 50,000 ordinary shares and chief financial officer Fiona Ryder buying 24,993 shares in the company. The purchases, executed on 26 May 2026 on the Lon...
Executive/Board ChangesStock BuybackDividendsShareholder Meetings
Convatec AGM backs all resolutions as investors flag concern on pay
Neutral
May 21, 2026
Convatec shareholders approved all resolutions at the company’s annual general meeting in London, including the 2025 accounts, a dividend, auditor appointment and authorities for share issuance, buybacks and shorter notice for general meetin...
Business Operations and StrategyFinancial Disclosures
ConvaTec Delivers Solid Start to 2026 and Reaffirms Growth Targets
Positive
May 21, 2026
ConvaTec reported a solid start to 2026, with year-to-date organic revenue growth of 4.8% excluding InnovaMatrix and broad-based gains across all major categories, supported by successful product launches such as ConvaFoam, Esteem Body and GentleC...
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.