Smith & Nephew share price: UBS no longer sees group as ‘buy’

Analysts cast doubt on group’s orthopaedic footprint

Smith & Nephew share price: UBS no longer sees group as ‘buy’

Analysts at UBS have trimmed their stance on Smith & Nephew (LON:SN), after a survey of surgeons polled by the broker indicated that the FTSE 100 group’s share of the orthopaedic surgical robots market will not be as big as first thought, WebFG News reports. The move came after the artificial hips and knees maker recently updated investors on its performance, revealing that its emerging markets had returned to growth in the second quarter of the year following a difficult first quarter. 

Smith & Nephew’s share price closed marginally lower in the previous session, giving up 0.22 percent to 1,360.00p, underperforming the broader UK market, with the benchmark FTSE 100 index gaining 58.17 points to close 0.75 percent higher at 7,776.65. The group’s shares have added just under one percent to their value over the past year, as compared with about a three-percent gain in the Footsie.

UBS no longer bullish on S&N

UBS lowered its stance on Smith & Nephew from ‘buy’ to ‘neutral’ yesterday, and trimmed its price target on the shares from 1,470p to 1,340p. WebFG News quoted the broker as saying that its underlying market view remained that adoption of surgical robots will be ‘widespread in orthopaedics’.

“However we now believe our initial assumption of S&N's share of the market was too positive,” the analysts explained, having revised their survey of surgeons and found respondents were “less aware of, and less likely to purchase” S&N’s Navio than expected. UBS also noted that following discussions with industry experts, it also saw some risk of a slowdown in the wound market due to increased competitive intensity.

Other analysts on blue-chip group

Deutsche Bank reaffirmed Smith & Nephew as a ‘sell’ in the wake of the group’s results without specifying a price target on the shares. According to MarketBeat, the artificial hips and knees maker currently has a consensus ‘hold’ rating and an average price target of 1,360.00p.

As of 08:11 BST, Thursday, 09 August, Smith & Nephew plc share price is 1,230.50p.

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