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Highlights

  • Berenberg’s Sam England maintains a “Buy” rating on Convatec Group PLC.
  • Target price set at AUD 6.90, representing 35.14% upside from current levels.
  • Convatec announces AUD 300 million share buyback.

Convatec Group PLC (LSE:CTEC), a global medical products and technologies company, has attracted renewed confidence from analysts and rating likely to be backed by the recently released interim results for the first half of 2025. Berenberg’s Sam England reaffirmed a “Buy” rating on the stock, setting a target price of AUD 6.90. This forecast represents a potential 35.14% upside from Convatec’s latest share price of AUD 5.11 equivalent (GBP 2.44).

England’s recommendation underscores Berenberg’s positive stance on Convatec’s growth trajectory. The AUD 6.90 price target also sits above the broader market average of AUD 6.52.

Share Buyback Programme

Convatec announced a non-discretionary share buyback programme of up to AUD 300 million, effective immediately and running until 31 December 2025. The programme, conducted through UBS AG London Branch, aligns with the company’s disciplined capital allocation strategy and reflects surplus cash flow generation.

Details of Interim Results

For the six months ended June 2025, Convatec reported broad-based organic revenue growth across all divisions:

  • Advanced Wound Care (AWC): +4.3% (ex-InnovaMatrix®), supported by uptake of ConvaFoam™ and continued momentum in Aquacel® Ag+ Extra™.

  • Ostomy Care (OC): +4.7%, driven by new patient adoption in the US and the successful rollout of Esteem Body™.

  • Continence Care (CC): +6.7%, with sales growth in the US and international markets.

  • Infusion Care (IC): +14.1%, reflecting rising demand in diabetes and non-diabetes therapies, particularly AbbVie’s Parkinson’s treatment using Neria™ Guard.

At group level, adjusted operating margin expanded 130 basis points to 21.3%, while adjusted diluted EPS grew 19%. Reported diluted EPS surged 34%.

The order book also remained healthy, supported by successful new product launches and regulatory approvals. Notably, Convatec secured EU and UK clearance for ConvaNiox™, an innovative wound dressing powered by nitric oxide, with market rollout planned in the second half of 2025.

Outlook

Convatec reiterated its full-year 2025 guidance, forecasting 5.5%–7% organic revenue growth (excluding InnovaMatrix®), adjusted operating margin of 22.0–22.5%, and another year of double-digit EPS growth. With net debt-to-EBITDA down to 1.9x and cash generation improving, the company remains on track to achieve its medium-term target of mid-20s% adjusted operating margin by 2026–2027.