Smith & Nephew Share Discussion Threads

[its the oxman] 02/1/2022 00:21

SN remains cheap cheap cheap. Sentiment is shot but covid can't last forever can it? Clamour and waiting lists for hip replacements etc will have to be addressed at some point. Surely now is the time to buy with management under pressure to deliver. The risk of a bid is ever present as well. Just my thoughts.

[pdosullivan] 01/1/2022 17:24

Hi all, I have written a blog on Smith + Nephew, which I am a shareholder in, that may be of interest to you. The blog can be found here: https://tbifund.wordpress.com/2022/01/01/smith-nephew-sn-ln-its-hip-to-be-square/

[philanderer] 21/12/2021 14:35

Questor: accelerating earnings growth and a better valuation could drive capital gains from S&N

Questor share tip: Smith & Nephew, the healthcare firm, already makes plenty of cash and now aims to drive sales and margins higher

[1nf3rn0] 17/12/2021 16:37

One of HL's 5 stocks for 2022"Smith & Nephew is a medical device maker with the potential to mount an impressive recovery in the year ahead.The group operates through three segments – Orthopaedics, offering hip and knee replacements, Sports Medicine, a soft tissue repair business, and Wound Management, providing materials to manage injuries and prevent infection. All three were stifled by the pandemic as elective surgeries plummeted and long-term care facilities closed to new patients.While Smith & Nephew's been struggling against supply chain headwinds, things are starting to normalise. In particular we think there's significant opportunity in the group's Sports Medicine and Orthopaedics businesses. Both were hit by delays from the pandemic.But demand hasn't gone away, operations have just been delayed – setting the stage for a very strong recovery. And Smith & Nephew will be meeting this wave of demand with a much more efficient business.High fixed costs meant lower revenue last year weighed on profits. That pushed the group to embark on a restructuring effort designed to lower its overall cost base, optimising the manufacturing network and outsourcing warehousing and distribution. The project will cost around $350m, but save the group $200m per year by 2025.This was part of the reason operating margins in the first half were 9.2%, compared to 16.9% pre-pandemic. However, excluding restructuring costs and a handful of other one-off expenses, margins were 17.6%.If it weren't for supply chain issues and the Delta variant's impact, Smith & Nephew would be rolling into 2022 with a budding recovery. But alas the group is expecting underlying margins to be a tepid 18-19%. Coupled with a modest 2.3% dividend yield, the market isn't overly excited. That's reflected with the group's P/E ratio of 18.9, roughly in line with the long-term average.We think this valuation doesn't adequately capture the opportunity ahead.If the pandemic continues to recede in 2022, the backlog of elective surgeries postponed in 2020 will flood the market. Smith & Nephew, with its new leaner cost base, is in a strong spot to capitalise. The group's also got a relatively strong balance sheet, with net debt roughly 2 times last year's cash profits. So there's some breathing room if the group needs to weather another difficult year."

[1nf3rn0] 17/12/2021 16:34

Analysts at Berenberg raised their target price on medical services firm Smith & Nephew from £18.25 to £18.40 on Friday following the firm's "extensive meet-the-management event" a day earlier.Berenberg stated Smith & Nephew had laid out its medium-term margin expectations and committed to regular share buybacks at the event, leading it to take a fresh look at the stock in order to factor the new disclosure into its forecasts.Overall, Berenberg said its view on S&N remained unchanged, asserting that it was "a much better business" than the market gives it credit for and, if it can deliver on its promises, the analysts said potential upside for the shares was "significant".Factoring in recent Covid-19 trends and new guidance resulted in 7-9% reductions to the German bank's 2022-2026 adjusted earning per share estimates but Berenberg stated a slight drop in the risk-free rate and a lower equity weighting in its weighted average cost of capital calculation, along with rolling the discounted cash flow forward to 2022, meant its DCF-derived price target increased to £18.40 per share, almost exactly 50% above Thursday's closing priceWhile Berenberg, which reiterated its 'buy' rating on the stock, acknowledged that Smith & Nephew's products were largely used in elective surgery procedures, leaving it "vulnerable" to the effects of Covid-19 on procedure rates, the analysts believe the however long effects from the coronavirus persist, it expects them to be "transitory" and to have "little to no bearing on the long-term outlook".

[roguetraderuk] 17/12/2021 16:27

based on a usd share price of 32.85, they are on a 22 fwd of 17.2 a 23 fwd of 15 and a 24 fwd of 13.

[essentialinvestor] 17/12/2021 15:08

Nope, that's not correct.

This is the same discussion I had a number of months ago on here.

To be fair it's an easy mistake to make as SN report in USD.
Convert those earnings in to GBP and recalculate.


Mentioned it on the SHA board in case you do not see the above.

[roguetraderuk] 17/12/2021 14:50

they are on 17 15 and 12 for 22 23 and 24 respectively. its not at all excessive given the growth rate. its down here given that covid is dragging out. berenberg sort of mentions this in their note and highlights that the lt forecast discounts that. they derive there 1840 tgt on 2022 dcf after meeting the management this week.

[essentialinvestor] 17/12/2021 14:22

SN never got anywhere near bargain levels, look at the forward multiples
on current consensus over the next 3 years.

Is that justified? - any BOD members buying except exercising options?.

[roguetraderuk] 17/12/2021 14:13

some advice re sn. the share price will begin to outperform when the mkt believes elected surgery for sn. has turned the corner. it will likely go mkt perform as others start giving signals (stryker, medtronic, intuitive etc) but as i say the big outperformance will come when the company points to a return to trend growth. demand issue and supply chains issues all due to covid and the variants are extending the point of turn in trend. i think it should reach equilibrium by q2 2022, i suspect the shares will bottom by then if not sooner. it all depends on the news and if its leaked and other news from others in the area. i dont think they will get too much cheaper as i would expect the americans to start sniffing. there is plenty to put right at sn. but that means a large upside for any buyer. personally i think they will stay independant until jnj do their split and the jnj arm likely picks up sn. but we will see. if they get cheap enough (10 quid or lower) someone may step up earlier. given that they are likely to underperfrom their peers next year, i wouldnt expect outperformance from here now, but of course i cant see the future and a bid would change all that.

[essentialinvestor] 16/12/2021 17:38

brwo, might be best to ignore the price target or at least not take
too much notice. It's consensus earnings estimates to watch fwiw.

[brwo349] 15/12/2021 22:06

This is brutal. Now 1200p. Is there any science behind these price targets or are they random numbers?

[philanderer] 05/11/2021 10:36

JPMORGAN CUTS SMITH & NEPHEW PRICE TARGET TO 1,379 (1,579) PENCE - 'NEUTRAL'

CREDIT SUISSE CUTS SMITH & NEPHEW PRICE TARGET TO 1,700 (1,805) PENCE - 'OUTPERFORM'

BERENBERG CUTS SMITH & NEPHEW PRICE TARGET TO 1,825 (1,880) PENCE - 'BUY

[its the oxman] 04/11/2021 08:54

Relief rally, market was expecting worse. Hopeful things can improve from here.

[suetballs] 04/11/2021 08:53

Looks like we're on our way back.
tbh with covid more on the back foot it was always going to happen.
Happy Suet

[1nf3rn0] 04/11/2021 08:26

Smith & Nephew PLC said Thursday that revenue for the third quarter of its fiscal year rose, and that it is on track to deliver at the lower end of guidance for the year due to the pandemic.The U.K. medical-technology company said third-quarter revenue rose 5.5% on a reported basis to $1.27 billion. On an underlying basis revenue rose 2.3%, the company said.Smith & Nephew said that for the quarter ended Oct. 2, revenue in its orthopaedics division fell 0.7% to $508 million on a reported basis, and fell by 5.9% on an underlying basis. The company said this was a reflection of the effect of the Delta variant of the Covid-19 virus in U.S. as well as supply constraints.For 2021, the company guided for underlying revenue growth in the 10% to 13% range, with a trading profit margin range of 18% to 19%.The company said that in terms of reported revenue growth it expects a foreign-exchange benefit of 230 basis points based on exchange rates prevailing on Oct. 29, and completed acquisitions to add around 190 basis points.

[roguetraderuk] 04/11/2021 07:55

they missed but at least they still grew and talk about further growth. there may be equilibrium in 6 months time imo. 1000-1200 is a consolidation zone from 2015-2017, i see that as a very interesting area.

[chard1980] 04/11/2021 07:09

'Low end of Guidance' Could see a lower buying opportunity.

[philanderer] 29/10/2021 13:30

(RTTNews) - Shares of Stryker Corp. (SYK) slipped over 3% in extended trading session on Thursday after the company lowered its full year 2021 outlook.

The company now expects full year organic net sales growth of 7% to 8% compared to 2019, and adjusted earnings of $9.08 to $9.15 per share.

Previously, the company expected organic net sales growth of 9% to 10% from 2019, and adjusted earnings of $9.25 to $9.40 per share.

[value viper] 29/10/2021 13:07

SN. Updates next week

[roguetraderuk] 29/10/2021 13:07

berenberg noted a few weeks ago sums it up nicely "firm was now facing a "bumpier road" to the "same destination""
"Thus, if we only took a short-term view, we would find it hard to recommend buying Smith & Nephew's shares, but they are so undervalued, in our view, that we simply view any near-term volatility as an opportunity," said the analysts.

so this isnt an overnight play, but if management can execute, there should be considerable upside on, i would say, a 2 or 3 year timeframe.

[value viper] 29/10/2021 13:07

Stryker (US) guides lower I understand- need to buy SN. !!

[essentialinvestor] 29/10/2021 12:10

Dividend reinvestment a.


SN, is selling on 22.5 X FY 2022 and I'm guessing FY forecasts will be reduced.


So yes it's a bargain, ain't it ;

[laptop15] 29/10/2021 11:24

Been buying today....looks a good opportunity and I also see a few director buys....some only mentions the sells and forgets to mention the buys ;-)