LONDON, UK / ACCESSWIRE / June 13, 2017 / Following the latest quarterly review, Coats Group (LSE: COA) is to enter the FTSE 250 Index with effect from 19 June. As well as signifying a strong share price performance over the last year, this concludes the company's transition phase to a strong independent entity, in our view. Valuation metrics are on a more conventional footing now and, as the market's understanding of the underlying business model increases, we sense that it is starting to anticipate faster growth rates.

The FY17 P/E and EV/EBITDA now stand at 14.5x and 8.4x, respectively, and we expect these multiples to trend down gradually over the following two years. These are not high in conventional terms but could be considered so in the context of our current growth expectations. We suspect that there will be upward pressure here as FY17 progresses but, otherwise, share price progress may pause until this becomes more visible. Coats offers a 1.6% prospective dividend yield.

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