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Smith & Nephew share price: Berenberg lifts valuation on stock

Berenberg has lifted its price target on Smith & Nephew (LON:SN) following the blue-chip group’s latest update. WebFG News reports that the analysts nevertheless note that the improved earnings growth reported by the hips and knees maker appears to already be priced in. Smith & Nephew posted a rise revenue for the third quarter of the year, having benefitted from growth in the US and Emerging Markets.

Smith & Nephew’s share price has been little changed in London in today’s session following yesterday’s advance, having inched 0.33 percent higher to 1,361.50p as of 13:46 GMT. The shares are underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.85 percent higher at 7,174.96 points.

Berenberg weighs in on S&N

Berenberg reaffirmed Smith & Nephew as a ‘hold’ today, while lifting its price target on the shares from 1,370p to 1,475p. WebFG News quoted the analysts as explaining that the FTSE 100 company’s  new commercial structure had disclosed at the time of its third-quarter sales, the results themselves as well as the slight increase in margin guidance had increased its confidence in the group’s earnings outlook, leading it to increase its adjusted earnings per share estimates by one-two percent.

Although the ‘sharply positive’ share price reaction to these factors led the broker to believe that expectations remained low, Berenberg nevertheless believes that the “improved earnings growth is already somewhat priced in”.

Other analysts on FTSE 100 group

Barclays, which is ‘overweight’ on Smith & Nephew, lowered its price target on the stock from 1,770p to 1,685p today. According to MarketBeat, the artificial hips and knees maker currently has a consensus ‘hold’ rating and an average price target of 1,695.91p.

As of 14:08 GMT, Friday, 02 November, Smith & Nephew plc share price is 1,365.00p.

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