Coloplast Faces Pandemic-Driven Disruption to Patient Flow; No Change to Our Fair Value Estimate

In addition to significant foreign exchange headwinds in fiscal second quarter, Coloplast also faced anemic demand thanks to the pandemic--an atypical situation for this firm. However, we anticipate growth should accelerate in the second half of the year as COVID-19 recedes and non-pandemic surgical procedures recover, and we remain comfortable with our valuation, especially considering Coloplast’s firm grip on expenses. Despite these external factors pressing down on Coloplast’s business, we see little to shift our thinking on the firm’s narrow economic moat. Despite the disruption in patient flow and surgical procedures, Coloplast is focused on what it does best--thoughtful innovation and supporting end-patients and customers.