ConvaTec (GB:CTEC)
LSE:CTEC
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ConvaTec
(LSE:CTEC)
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Rating:67Neutral
Price Target:
245.00 p
▲(12.08% Upside)
Action:ReiteratedDate:02/26/26
The score is driven primarily by solid underlying financial performance (growth, improving operating margins, positive free cash flow) and supportive guidance for continued growth and margin expansion. This is tempered by increased leverage and notable operational/regulatory risks flagged on the call, while valuation looks expensive and technicals appear near overbought despite an uptrend.
Positive Factors
Consistent Organic Growth
Five consecutive years of organic growth, 2025 at 6.4% ex‑InnovaMatrix and guidance of 5–7% for 2026 with a medium‑term 6–8% target, indicate durable end‑market demand and recurring consumable usage. This repeatable growth profile supports multi‑year revenue visibility, capacity planning, and predictable cash generation for reinvestment.
Negative Factors
Reimbursement Risk (InnovaMatrix)
A CMS pricing change slashed InnovaMatrix prices (~80% reduction), triggering a sales collapse and a $72m non‑cash impairment and leaving a ~2% group revenue headwind in 2026. This highlights structural reimbursement vulnerability for acquired/specialty products and shows how policy shifts can permanently impair returns and growth prospects for targeted product lines.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent Organic Growth
Five consecutive years of organic growth, 2025 at 6.4% ex‑InnovaMatrix and guidance of 5–7% for 2026 with a medium‑term 6–8% target, indicate durable end‑market demand and recurring consumable usage. This repeatable growth profile supports multi‑year revenue visibility, capacity planning, and predictable cash generation for reinvestment.
Read all positive factors
ConvaTec (CTEC) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£4.26B
Dividend Yield2.11%
Average Volume (3M)6.27M
Price to Earnings (P/E)37.1
Beta (1Y)0.94
Revenue Growth4.18%
EPS Growth37.65%
CountryUK
Employees10,489
SectorHealthcare
Sector Strength45
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)0.07
Shares Outstanding1,954,852,000
10 Day Avg. Volume5,278,857
30 Day Avg. Volume6,266,139
Financial Highlights & Ratios
PEG Ratio-7.34
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
£321.70Price Target Upside47.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
EPS Forecast (FY)0.2
Revenue Forecast (FY)£2.57B
ConvaTec Business Overview & Revenue Model
Company Description
ConvaTec Group Plc develops, manufactures, and markets medical products and technologies worldwide. It offers advanced wound dressings and skin care products for the management of acute and chronic wounds resulting from various conditions, such as...
How the Company Makes Money
ConvaTec makes money primarily by selling consumable medical products and related accessories used repeatedly in ongoing patient care, generating recurring revenue. Revenue is largely derived from four product categories: (1) Advanced Wound Care, ...
ConvaTec Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The earnings call conveyed a generally positive financial and operational performance: strong organic growth excluding the InnovaMatrix disruption, margin expansion, double-digit EPS growth, robust cash generation, increased growth CapEx and an active return-of-capital program. Key strategic strengths include a broad-based pipeline, improving product launches (notably Infusion Care), and clear 2026 and 2027 targets. However, material near-term challenges temper the outlook: a severe CMS-driven price cut and $72 million impairment for InnovaMatrix, an FDA warning letter on complaints/CAPA processes, inflationary pressure, and execution/capacity risks that management is addressing. Overall, the positives (growth, margins, cash, pipeline, capital allocation) substantially outweigh the negatives, though the operational and regulatory issues warrant active mitigation.Positive Updates
Consistent Organic Revenue Growth
Five consecutive years of organic revenue growth within target range; 2025 organic revenue growth of 6.4% excluding InnovaMatrix, and company note of five years >5% and three years >6% (ex-InnovaMatrix). 2026 guidance: 5%–7% organic growth (ex-InnovaMatrix) and long-term target of 6%–8% p.a. from 2027.
Negative Updates
InnovaMatrix Sales Collapse and Impairment
InnovaMatrix sales decreased by $30 million to $69 million in 2025 with H1 down ~13% and H2 down ~44%. CMS price rate introduced on 1 Jan 2026 (~$127 per cm²) represented an ~80% price reduction for InnovaMatrix. Company recorded a non-cash impairment of $72 million (~20% of acquisition consideration) and expects InnovaMatrix to be a ~2% group revenue headwind in 2026 (sales guided to ~ $20 million, H2 weighted).
Read all updates
Q4-2025 Updates
Positive
Negative
Consistent Organic Revenue Growth
Five consecutive years of organic revenue growth within target range; 2025 organic revenue growth of 6.4% excluding InnovaMatrix, and company note of five years >5% and three years >6% (ex-InnovaMatrix). 2026 guidance: 5%–7% organic growth (ex-InnovaMatrix) and long-term target of 6%–8% p.a. from 2027.
Read all positive updates
Company Guidance
Management guidance for 2026 reiterated organic group revenue growth of 5–7% excluding InnovaMatrix (which is expected to contribute ~ $20m in 2026, strongly H2‑weighted and representing roughly a 2% group revenue headwind), with operating margin of at least 23% and another year of double‑digit EPS growth; cash generation is expected to be strong with free cash‑flow‑to‑equity conversion targeted around 100%, operational CapEx roughly 2.5% of sales and growth CapEx increasing above 2025’s $121m to fund capacity, while leverage is managed at ~2x net debt/EBITDA and dividends are to grow in line with profits. Looking beyond 2026, the company raised its medium‑term ambition to 6–8% organic growth from 2027 with a mid‑20s operating margin, sustained double‑digit EPS growth and continued strong FCF conversion, building on 2025 results of 6.4% organic growth (ex‑InnovaMatrix), 22.3% operating margin, 16% EPS growth, $362m FCF to equity (101% conversion), a $300m buyback and a $72m InnovaMatrix impairment.ConvaTec Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.49B | 2.29B | 2.14B | 2.07B | 2.04B |
| Gross Profit | 1.37B | 1.28B | 1.20B | 1.12B | 1.12B |
| EBITDA | 644.24M | 540.20M | 455.50M | 419.10M | 405.40M |
| Net Income | 178.67M | 190.50M | 130.30M | 62.90M | 117.60M |
Balance Sheet | |||||
| Total Assets | 3.78B | 3.52B | 3.71B | 3.59B | 3.67B |
| Cash, Cash Equivalents and Short-Term Investments | 75.03M | 64.70M | 98.30M | 145.80M | 463.40M |
| Total Debt | 1.61B | 1.20B | 1.31B | 1.30B | 1.44B |
| Total Liabilities | 2.26B | 1.83B | 2.02B | 1.98B | 1.98B |
| Stockholders Equity | 1.52B | 1.69B | 1.69B | 1.61B | 1.69B |
Cash Flow | |||||
| Free Cash Flow | 342.03M | 274.10M | 238.20M | 137.50M | 211.80M |
| Operating Cash Flow | 479.86M | 396.20M | 367.40M | 281.70M | 305.90M |
| Investing Cash Flow | -212.36M | -160.80M | -285.70M | -348.30M | -206.50M |
| Financing Cash Flow | -263.41M | -263.80M | -124.00M | -237.10M | -199.90M |
ConvaTec Technical Analysis
Negative
218.60
Price Trends
232.58
Negative
234.75
Negative
239.34
Negative
Market Momentum
-4.19
Positive
38.03
Neutral
40.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:CTEC, the sentiment is Negative. The current price of 218.6 is below the 20-day moving average (MA) of 233.18, below the 50-day MA of 232.58, and below the 200-day MA of 239.34, indicating a bearish trend. The MACD of -4.19 indicates Positive momentum. The RSI at 38.03 is Neutral, neither overbought nor oversold. The STOCH value of 40.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:CTEC.
ConvaTec Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | £177.35M | 12.60 | 23.64% | 3.48% | 10.80% | 1.75% | |
70 Outperform | £10.13B | 22.64 | 11.79% | 2.35% | 2.51% | 56.56% | |
67 Neutral | £4.26B | 37.08 | 10.53% | 2.11% | 4.18% | 37.65% | |
60 Neutral | £794.17M | 29.48 | 5.35% | 0.67% | 4.00% | -6.98% | |
56 Neutral | £415.04M | 47.21 | 3.69% | 1.25% | 68.03% | -18.27% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
GB:CTEC
ConvaTec
218.60
-34.68
-13.69%
GB:AMS
Advanced Medical Solutions
191.80
-42.22
-18.04%
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GB:TSTL
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370.00
82.36
28.63%
GB:SN
Smith & Nephew
1,193.00
146.75
14.03%
ConvaTec Corporate Events
Regulatory Filings and ComplianceShareholder Meetings
Convatec Sets Date and Details for 2026 Annual General Meeting
Neutral
Mar 17, 2026
Convatec Group Plc has scheduled its 2026 annual general meeting for 14:00 UK time on 21 May 2026 at its London headquarters on Eastbourne Terrace. The notice of meeting and proxy form have been dispatched to shareholders, filed with the UK Nation...
Executive/Board ChangesRegulatory Filings and Compliance
Convatec Executives Receive Vested Share Awards Under Long-Term Incentive Plans
Positive
Mar 17, 2026
Convatec has disclosed that conditional share awards granted in 2023 to chief executive Jonny Mason and chief financial officer Fiona Ryder under its Long Term Incentive Plan and Deferred Bonus Plan vested on 15 March 2026 and were released on 16 ...
Business Operations and StrategyExecutive/Board Changes
Convatec Grants New Long‑Term Equity Awards to CEO and CFO
Positive
Mar 12, 2026
Convatec has awarded substantial long‑term share incentives to chief executive Jonny Mason and chief financial officer Fiona Ryder under its 2025 Omnibus Incentive Plan. The performance share awards will vest in three years subject to target...
Financial DisclosuresRegulatory Filings and Compliance
Convatec Publishes 2025 Annual Report and Files With UK Regulator
Neutral
Mar 10, 2026
Convatec Group has published its Annual Report and Accounts for the financial year ended 31 December 2025 on its corporate website, with printed copies to be mailed to shareholders who have opted for paper communications. The report has also been ...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresPrivate Placements and Financing
ConvaTec Lifts Growth Targets After Strong 2025 Earnings and Margin Gains
Positive
Feb 24, 2026
ConvaTec posted 2025 revenue of $2.44 billion, up 6.5% on a reported basis, with organic growth excluding InnovaMatrix of 6.4% and broad-based gains across advanced wound care, ostomy care, continence care and infusion care. Adjusted operating pro...
Regulatory Filings and Compliance
Convatec Confirms Year-End Share Capital and Voting Rights
Neutral
Jan 2, 2026
Convatec Group has disclosed its total voting rights as of 31 December 2025, reporting an issued share capital of 2,049,789,559 ordinary shares of 10 pence each, of which 94,937,530 are held in treasury without dividend or voting rights. This leav...
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.