Smith & Nephew, the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Julien Ouaddour from Bank of America Securities reiterated a Buy rating on the stock and has a p1,600.00 price target.
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Julien Ouaddour has given his Buy rating due to a combination of factors that suggest Smith & Nephew is poised for growth. The company’s management has laid out an ambitious plan for 6-7% organic growth and 9-10% trading profit growth by 2028, which indicates potential upside compared to current market expectations. This growth is expected to be driven by a strong product pipeline across various business segments, strategic investments in high-growth areas, and expansion into promising channels and geographies.
Furthermore, improved inventory management is anticipated to unlock significant free cash flow, enabling substantial shareholder returns and enhancing return on invested capital. Despite some skepticism about execution, the market appears to undervalue the company’s improved execution track record. With shares trading at a relatively low price-to-earnings ratio compared to expected earnings growth, Smith & Nephew presents a compelling value proposition with potential for re-rating towards the sector average.
Based on the recent corporate insider activity of 74 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SN in relation to earlier this year.