JPM ups Coloplast on fair valuation, balanced earnings

Coloplast A/S

13/03/2025 09:03

** J.P.Morgan raises Coloplast COLOb.CO to "neutral" from "underweight," saying the Danish medical equipment maker's shares are now fairly valued, with more balanced earnings and valuation risks

** The stock has lagged the sector year-to-date, which may be due to a softer Q1, concerns about profit margins, potential share losses, JPM says

** Two deals with reduced returns, a drop in ROIC, and increased competition from Convatec may have affected the Q1 results, it adds

** JPM adds the current valuation is close to a 10-year low, as it fell from its COVID highs, however, so did its earnings

** JPM says it would need to see earnings upgrades to justify a further premium, but it currently sees limited near-term catalysts that could drive up the valuation

** However, the broker notes potential benefits in 2026 from market share shifts related to Local Coverage Determination and changes in hydrophilic catheter reimbursement

** Out of 24 analysts covering the stock, 10 rate it "strong buy" or "buy," 11 rate it "hold," and three "sell"

 (Reporting by Vera Dvorakova)

 ((vera.dvorakova@thomsonreuters.com))