COLO B: Sustained Margin Strength Will Support Upside As Dividend Payouts Increase

Analysts have nudged our Coloplast fair value estimate slightly higher to about DKK 689 per share from roughly DKK 689 previously, reflecting a modest uptick in long term multiple assumptions even as recent Street price target revisions have moved in mixed directions.

Analyst Commentary

Recent Street actions on Coloplast highlight a divided view on near term upside versus longer term execution and growth. Price targets cluster well below our intrinsic value estimate but still signal a degree of confidence in the company’s fundamental resilience.

Bullish Takeaways

• Bullish analysts lifting price targets, even from already cautious stances, point to improving conviction that current earnings power and margin trajectory are at least sustainable, supporting some multiple expansion over time.
• Upward revisions, though modest, suggest that near term operational delivery and cash generation are tracking slightly better than previously modeled, which can underpin continued dividend support and selective reinvestment in growth.
• The maintenance of ratings despite share price moves indicates that the Street sees Coloplast as fairly well positioned in its core categories, with limited risk of a structural de rating absent a material execution stumble.
• Consensus targets remain at a meaningful discount to our fair value estimate, leaving scope for upside as Coloplast demonstrates consistent volume growth and mix improvement, potentially narrowing the gap between market price and intrinsic value.

Bearish Takeaways

• Bearish analysts trimming price targets signal concern that near term growth may undershoot prior expectations, particularly if reimbursement pressure or competitive intensity weigh on volume and pricing.
• Lowered targets and Neutral or Underweight stances point to a belief that current valuation already discounts a robust margin profile, leaving limited room for further multiple expansion without a clearer acceleration in topline growth.
• The persistence of cautious ratings despite a long track record of solid execution reflects worries that Coloplast could face a slower ramp in newer initiatives, delaying operating leverage benefits and constraining earnings upgrades.
• Overall, the balance of Street targets below our fair value highlights an ongoing debate about how much growth premium Coloplast deserves. Skeptics require more evidence of sustained, above market growth before assigning a higher structural multiple.

What's in the News

• Coloplast A/S AGM approved a year end dividend of DKK 18.00 per share of nominally DKK 1 on 4 December 2025, confirming strong cash returns to shareholders (AGM resolution).
• The Board of Directors recommended a year end dividend of DKK 18.00 per share, bringing the total dividend for the year to DKK 23.00 per share, up from DKK 22.00 last year (Board recommendation).
• Coloplast issued guidance for fiscal 2025 to 2026, targeting around 7% organic revenue growth and around 7% EBIT growth in constant currencies, highlighting its mid single digit expansion ambitions (company guidance).

Valuation Changes

• Fair Value Estimate inched up slightly to about DKK 689 per share from roughly DKK 689 previously, reflecting a marginally higher long term valuation multiple.
• Discount Rate edged down slightly to around 6.09% from about 6.11%, implying a modestly lower required return for Coloplast’s cash flows.
• Revenue Growth eased slightly to roughly 6.67% from about 6.74%, signaling a marginally more conservative outlook on top line expansion.
• Net Profit Margin slipped slightly to around 20.66% from about 20.79%, indicating a small tempering of long term profitability assumptions.
• Future P/E rose slightly to about 26.5x from roughly 26.3x, pointing to a modest increase in the assumed valuation multiple applied to forward earnings.