Coloplast A/S (COLOB) gained the most among Copenhagen’s benchmark stocks after Bank of America Merrill Lynch said the world’s largest maker of ostomy products probably will pay out a special dividend as new offerings boost profits.
Coloplast rose as much as 2 percent, the most since Dec. 20. The shares gained 1.7 percent to 283.30 kroner at 9:04 a.m. in the Danish capital, with trading volume at 15 percent of the three-month daily average. The stock was the biggest winner in the Nasdaq OMX Copenhagen 20 index, which rose 0.1 percent.
Coloplast is investing more than 1 billion kroner ($174 million) over the next five years to expand sales, BofA Merrill Lynch said today in a note to investors. That’s enabling the Humlebaek, Denmark-based company to introduce new products and gain market share, increasing profits and probably triggering a special dividend as early as this year, the bank said.
“Coloplast can continue to outperform the wider European Union medtech sector in light of its potential to accelerate growth, through market share gains in the U.S. and emerging markets and new product innovation,” BofA Merrill Lynch analysts, including Ed Ridley-Day, said in the note.
Coloplast may reach a net cash position of 1.5 billion kroner by Sept. 30, 2013, the end of its current fiscal year, after repaying debt, according to the bank. That will exceed the company’s 1 billion-krone target and trigger the dividend if the company doesn’t make any strategic acquisitions, the analysts wrote. They repeated their recommendation to buy the stock.
Coloplast said Nov. 6 that full-year sales may rise as much as 7 percent, exceeding the 6 percent average estimate in a Bloomberg survey of analysts.
To contact the reporter on this story: Christian Wienberg in Copenhagen at firstname.lastname@example.org
To contact the editor responsible for this story: Tasneem Brogger at email@example.com