In a note on Thursday, the broker upgraded their rating on the medical products group to ‘buy’ from ‘add’ and raised its target price to 285p from 240p, saying that the firm had beaten expectations in its first-half results last August and again in its third quarter, delivering “surprise upgrades”.
The broker added that additional strong reports in the company’s final and first-quarter results had “reassured” them that the initial doubts were unfounded.
“We find it difficult to see ConvaTec not meeting or beating the top of its 2021 guidance range (its warnings about potential third waves and emerging market weakness notwithstanding)”, Peel Hunt said.
The broker also said that aside from their newly raised target price, they also saw a valuation of 320p as being “achievable if current positive progress is maintained”.
Shares in ConvaTec rose 0.8% to 227.2p in late morning trading.