Back to previous section

Goldman starts Smith & Nephew at ‘buy’, cites improving fundamentals

Goldman Sachs initiated coverage of Smith & Nephew on Friday with a ‘buy’ rating and 1,400p price target, as it pointed to improving fundamentals and an undemanding valuation.

  • Smith & Nephew
  • 02 May 2024 14:00:25
Smith & Nephew

Source: Sharecast

It noted the shares have underperformed European Medtech in three of the last four years and have lagged the sector by around 12% year-to-date.

"The cumulative underperformance since 2019 is more than 45%," it said. “We think that is set to change. We see a clear case for improved performance leading to +5/13/15% revenue/EBIT/EPS compound annual growth rate in FY23-25e, which is a meaningful acceleration and looks compelling in the context of valuation."

The bank said the ortho segment has held back Smith & Nephew’s performance in recent years, but evidence points to an improving trajectory.

"Operational and commercial issues weighed on performance in Ortho but improving commercial execution, innovation and disciplined pricing can drive better growth," it said. "Smith & Nephew has narrowed the gap versus peers in recent quarters, and we believe evidence points to an improving trajectory."

Goldman also said the company’s medium-term margin targets are challenging but achievable.

FTSE 100 ( UKX )

Isin: N/A
Exchange: London Stock Exchange
Sell:
0.00
Buy:
0.00
Change: 39.03 ( 0.48 %)
Date:
Prices delayed by at least 15 minutes

Compare our accounts

Whether you're looking for a Share Dealing Account or Share Dealing ISA, we've got an account to suit your needs.

View our accounts

Lloyds Bank is not responsible for the content and accuracy of the Markets News articles. We may not share the views of the author. Understand the risks, please remember the value of your investment can go down as well as up and you may not get back the full amount you invest. We don't provide advice so if you are in any doubt about buying and selling shares or making your own investment decisions we recommend you seek advice from a suitably qualified Financial Advisor. Past performance is not a guide to future performance.

Important legal information

The Lloyds Bank Direct Investments Service is operated by Halifax Share Dealing Limited. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Registered in England and Wales no. 3195646. Halifax Share Dealing Limited is authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.

Logo Allfunds

The information contained within this website is provided by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd unless otherwise stated. The information is not intended to be advice or a recommendation to buy, sell or hold any of the shares, companies or investment vehicles mentioned, nor is it information meant to be a research recommendation. This is a solution powered by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd incorporating their prices, data news, charts, fundamentals and investor tools on this site. Terms and conditions apply. Prices and trades are provided by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd and are delayed by at least 15 minutes.

FE fundinfo Logo

Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.

Refinitiv Logo

© 2024 Refinitiv, an LSEG business. All rights reserved.