Smith & Nephew: Strategic Integrity Orthopaedics Acquisition and Underappreciated Sports Medicine Growth Support Buy Rating

In a report released today, Julien Ouaddour from Bank of America Securities reiterated a Buy rating on Smith & Nephew, with a price target of p1,600.00.

Julien Ouaddour has given his Buy rating due to a combination of factors tied to Smith & Nephew’s strategic acquisition and growth outlook. He views the purchase of Integrity Orthopaedics as a value-enhancing move that broadens Smith & Nephew’s shoulder offering across the full treatment pathway, from biologic repair solutions to fixation devices and ultimately joint replacement systems. The deal is expected to be funded comfortably from existing resources, with management guiding to margin accretion by 2028, which supports the investment case. In addition, the current share price of 1,254 GBp sits at a notable discount to his 1,600 GBp price objective, implying meaningful upside potential.

Ouaddour also highlights that the market appears conservative on the company’s Sports Medicine growth, with consensus forecasts below management’s high-single-digit revenue CAGR target to 2028. He believes that the strengthened product portfolio – including REGENETEN, Agili-C, TESSA, and now the Tendon Seam system – positions Smith & Nephew to outperform these muted expectations. If the company successfully leverages its leading sports medicine franchise to drive adoption of these differentiated technologies, it could trigger upgrades to revenue and earnings forecasts. Together, the strategic fit of the acquisition, anticipated profitability benefits, and scope for positive estimate revisions underpin his reiterated Buy recommendation.

Ouaddour covers the Healthcare sector, focusing on stocks such as Koninklijke Philips N.V., Smith & Nephew, and Alcon. According to TipRanks, Ouaddour has an average return of 18.3% and a 67.86% success rate on recommended stocks.