Smith & Nephew: Entering a Faster Growth Phase with Re-Rating Potential on Conservative Guidance

Julien Ouaddour, an analyst from Bank of America Securities, reiterated the Buy rating on Smith & Nephew. The associated price target remains the same with p1,600.00.

Julien Ouaddour has given his Buy rating due to a combination of factors, including his view that Smith & Nephew is entering a faster organic growth phase and that management’s targets for FY26 and beyond are achievable. He argues that the company’s guidance is conservative relative to its underlying momentum, with 1Q26 organic sales expected around 3%, which he believes should be enough to improve perceptions of management’s execution.

Ouaddour also highlights a valuation opportunity, noting the shares trade around 13x FY27 earnings, leaving room for a re-rating if the company delivers on its growth plan. He sees scope for earnings upgrades because consensus remains below management’s mid‑term guidance, and he points to specific growth drivers such as a recovery in China and continued strength in Joint Repair products as support for his positive stance.