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.

Strategic restructuring, targeted innovation, and successful acquisitions are strengthening growth, operational efficiency, and diversification across premium and chronic care segments.
Expanding emerging market presence and user-focused product launches are driving recurring revenues, reducing regional dependence, and positioning Coloplast for sustained long-term momentum.
Intensifying pricing, regulatory, and currency pressures threaten Coloplast's revenue growth, margins, and brand reputation, amid operational risks and dependence on successful product innovation.

Catalysts

About Coloplast

Engages in the development and sale of intimate healthcare products and services in Denmark, the United States, the United Kingdom, France, and internationally.What are the underlying business or industry changes driving this perspective?

The ongoing reorganization into distinct Chronic Care and Acute Care units, with a dedicated R&D function for Chronic Care, is designed to accelerate innovation cycles and improve time-to-market for new products. This is expected to drive higher revenue and operating margins by leveraging user-focused innovation and maximizing manufacturing efficiency.
Robust growth in Chronic Care segments-especially Ostomy and Continence Care-continues to be supported by increasing global incidence of chronic conditions and a growing elderly population, expanding the addressable market and providing a stable foundation for predictable, long-term revenue and earnings growth.
Successful integration and scaling of recent acquisitions like Kerecis, along with the merger of Advanced Wound Dressings and biologics, is expected to enhance Coloplast's competitive positioning in premium wound care markets, supporting margin expansion and revenue diversification as healthcare spending and quality-of-life-focused solutions see secular increases.
Proactive commercial investments in high-growth emerging markets, especially tender-based business in Asia, Eastern Europe, and Latin America, position Coloplast to capture above-market growth, further diversifying revenue streams and reducing over-reliance on mature European regions-likely leading to sustained multi-year revenue and earnings momentum.
The company's user-centric innovation, ongoing product launches (e.g., Luja, SenSura Mio, Provox Life), and pipeline progress (e.g., INTIBIA) are poised to benefit from the accelerating trend toward home-based healthcare and patient-managed solutions, supporting not only top-line growth but also higher recurring revenues and improved net margins over time.

Coloplast Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Coloplast's revenue will grow by 7.3% annually over the next 3 years.
Analysts assume that profit margins will increase from 14.6% today to 21.2% in 3 years time.
Analysts expect earnings to reach DKK 7.3 billion (and earnings per share of DKK 32.89) by about September 2028, up from DKK 4.1 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as DKK6.1 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 26.2x on those 2028 earnings, down from 34.3x today. This future PE is lower than the current PE for the GB Medical Equipment industry at 31.8x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 5.89%, as per the Simply Wall St company report.

Coloplast Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The implementation of competitive bidding by CMS in the U.S. Chronic Care business could introduce significant pricing pressure starting as early as 2027, affecting approximately 6% of total group sales (50% of the 12% U.S. Chronic Care segment), with the potential for price reductions up to 30%, which would directly threaten revenue and compress net margins.
Regulatory complications and technical requirements unique to certain regions, such as China's strict local standards for wound dressings, have already triggered costly product returns (DKK 80 million impact in 2024-25 and ongoing headwinds into 2025-26), exposing Coloplast to recurring risks of sales interruptions and further negative impacts on revenue and earnings.
Ongoing and recurring product recalls, execution issues, and increasing regulatory scrutiny (both in Europe and China), pose risks to operational efficiency, brand reputation, and long-term profitability due to potential loss of market share to competitors and increased compliance costs.
Fluctuations in foreign exchange rates, particularly the depreciation of the U.S. dollar and emerging market currencies against the Danish krone, have negatively impacted reported revenues, and persistent currency volatility could continue to restrain revenue growth and earnings in future years.
The Acute Care segment is described as more volatile and dependent on innovation compared to the stable but slower-growing Chronic Care segment, implying that failure to deliver successful new launches or manage heightened R&D expenses could result in margin pressure, unpredictable earnings, and overall revenue volatility for the group.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of DKK716.111 for Coloplast based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of DKK962.0, and the most bearish reporting a price target of just DKK585.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be DKK34.4 billion, earnings will come to DKK7.3 billion, and it would be trading on a PE ratio of 26.2x, assuming you use a discount rate of 5.9%.
Given the current share price of DKK620.0, the analyst price target of DKK716.11 is 13.4% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

COLO B: Executive Team Changes And Chronic Care Strategy Will Drive Outperformance