Analyst Dylan Van Haaften of Stifel Nicolaus maintained a Hold rating on Smith & Nephew (SN – Research Report), with a price target of p1,025.00.
Dylan Van Haaften’s rating is based on a combination of factors, including Smith & Nephew’s recent financial performance and future outlook. The company reported a modest beat in its FY24 results, with improvements in both revenue and trading profit, which were slightly ahead of expectations. However, the outlook for FY25 is mixed, with anticipated revenue growth of around 5% and trading profit margins between 19.0-20.0%, which aligns with consensus but is only slightly above Stifel’s forecast.
Despite progress in the U.S. orthopedic market and improvements in cash flow and inventory, the company faces challenges, particularly from headwinds in China related to Sports Med and Joint repair. The anticipated slow start in 1Q25, with growth expected at 1-2%, is a concern and reflects these challenges. These mixed signals contribute to the Hold rating, as the positive aspects are balanced by potential risks, particularly in the early part of FY25.
In another report released today, Barclays also maintained a Hold rating on the stock with a £11.70 price target.