SNN Stock Forecast & Price Target

The financial performance of Smith & Nephew shows promising trends, particularly with an underlying growth rate of +5.3% and a significant increase in the orthopedic segment, which generated +5.5% reported growth, showcasing strong US sales despite challenges in the international market. The company has noted impressive expansion in its enabling technology, particularly with a 23.9% increase in Other Reconstruction revenues attributed to the success of the CORI system, indicating a solid foothold in the knee procedure market. Furthermore, the forecast for 2025 suggests sustained growth of approximately 5%, along with an expected trading profit margin between 19.0% and 20.0%, reinforcing a positive long-term outlook for Smith & Nephew.

Smith & Nephew's revenue guidance for FY25 suggests a weaker performance in Q1, attributed to factors such as fewer selling days and continued distributor inventory impacts in China. The company anticipates additional negative revenue impacts from value-based pricing (VBP) adjustments, particularly in its Advanced Wound Therapy segment, amounting to $25 million in the second half of 2025. Additionally, while the Orthopedic segment has achieved positive return on invested capital (ROIC), it remains significantly lower compared to the company's other segments, coupled with challenges stemming from the evolving US healthcare landscape and ongoing headwinds in emerging markets like China.