Convatec narrows growth guidance, provides 2026 outlook; stock jumps 7%

Investing.com -- Convatec shares rose over 7% on Thursday after the medical device company narrowed its full-year growth guidance and provided an outlook for 2026.

The UK-based manufacturer of products for chronic wound care, ostomy, continence and infusion devices reported organic revenue growth of 6.3% for the ten months ended October 30, excluding its InnovaMatrix product. The company narrowed its full-year 2025 guidance to 6-6.5% from the previous range of 5-7%.

Organic sales growth including InnovaMatrix reached 5%, while reported growth came in at 6.2%. 

Convatec maintained its adjusted operating profit margin guidance at 22-22.5%, which includes absorbing a 30 basis point impact worth $5 million to $10 million from tariff headwinds, according to the report.

The company completed $202 million of its ongoing $300 million share buyback program as of October 31. Convatec reiterated its guidance for double-digit growth in adjusted earnings per share for the full year.

For 2026, the company provided initial guidance calling for 5-7% organic growth excluding InnovaMatrix, with further operating margin expansion and double-digit earnings per share growth. 

“With the business remaining on course to deliver it’s near-term financial targets, we believe perceived overhangs are overdone, and we reiterate our Buy rating,” said analysts at RBC Capital Markets in a note.

All four business divisions performed within their guided growth targets. The Advanced Wound Care division achieved mid-single-digit growth excluding InnovaMatrix, with strong growth in North America as ConvaFoam continued to gain share. 

Growth in Europe is building with new product launches. The company revised its InnovaMatrix revenue forecast for 2025 to $70 million from at least $75 million.

InnovaMatrix faces changes as the expected removal of Medicare coverage in diabetic foot ulcers and venous leg ulcers with new local coverage determinations and new fixed pricing at $127 per square centimeter are both expected to be in place as of January 1, 2026. 

Randomized controlled trials in diabetic foot ulcers and venous leg ulcers are on track to report data in 2026.

The Ostomy Care division recorded mid-single-digit organic revenue growth, with good growth in North America and Europe, supported by new patient starts in Home Services Group. The Esteem Body product is performing strongly.

Continence Care delivered mid-to-high single-digit growth, with further growth in patient volumes in Home Services Group in North America, as well as continued strong growth in Europe. The new compact catheter, GentleCath Air for Women, is performing well.

The Infusion Care division maintained double-digit organic revenue growth, benefiting from continued diversification of customers and applications. 

Faster growth is coming from new customers, products and therapies, particularly Neria Guard for AbbVie’s treatment of Parkinson’s Disease.