On Thursday, Coats Group Plc (COA:LN) (OTC: CGGGF) shares saw its price target raised by Deutsche Bank from GBP0.90 to GBP1.12, while the firm maintained a Buy rating on the stock.
The adjustment follows Coats Group's interim results, which revealed the company's performance surpassed its own adjusted EBIT margin goal of 17% and achieved approximately 6% organic growth for the current financial year.
The report also highlighted that Coats Group is yet to make progress on pension fund de-risking, which is anticipated to have a net present value (NPV) roughly equivalent to 4% of the company's market cap. Deutsche Bank's updated forecasts now incorporate management's expectations for a full-year performance that is slightly ahead of market predictions.
In response to the company's guidance and recent achievements, Deutsche Bank has increased its adjusted earnings per share (EPS) estimate for FY24 by 5.2%, bringing it to 9.1 cents per share.
Additionally, the FY25 adjusted EPS estimate was also revised upward by 5.4%. The bank's analyst cited the interim results as a collection of equity value catalysts, which have been factored into the updated projections for Coats Group.
Investors are likely to keep an eye on Coats Group's future financial performance, particularly regarding the management's ability to deliver on their strategic objectives and further de-risk the pension fund, as these elements continue to play a significant role in the valuation of the company.
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