Coats Group PLC (LON:COA) can trace its origins back to the 1750s, so it is high time Citigroup commenced coverage on the textiles specialist.
The US bank has kicked off coverage of the industrial threads firm with a ‘buy’ recommendation and a target price of 109p.
READ: Coats shares jump as it lifts 2018 guidance after full-year profits rise
Shares in Coats currently trade at 84p, up 2.9% on the day; they started the year at 89p and fell as low as 74p in February before perking up.
Coats is the world’s largest supplier of sewing threads to manufacturers.
“One in five garments worldwide is constructed using Coats thread,” Citi noted.
“We see opportunities for the company to take share in a constantly adapting apparel & footwear market and separately become the global market leader in the fragmented speciality thread market. We view the low valuation as failing to reflect a stabilised core business with growth optionality,” the US bank said.