Morningstar

Smith & Nephew PLC SN.

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Stock XLON Rating as of
GBX 1,137.00 −3.00 (0.26%)
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As of Delayed Price Closed

Company Report

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Smith & Nephew: Turnaround Is Taking Hold, and New Products Should Support Moat

Debbie S. Wang

Now that Smith & Nephew has made gradual and steady progress on improving its operations since CEO Deepak Nath came aboard, we’ve taken another look at its newer technologies that we think should help support its narrow moat over the longer term. We are leaving our fair value estimate unchanged. While we remain pessimistic about the firm’s ability to wrestle large joint reconstruction market share away from larger rivals such as Stryker, Zimmer Biomet, and Johnson & Johnson, we are more optimistic about Smith & Nephew’s products in other therapeutic areas.

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Price vs Fair Value

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SN. is trading at a 426% premium.
Price
GBX 1,137.00
Fair Value
GBX 7,746.00
Uncertainty
Medium
1-Star Price
GBX 9,793.10
5-Star Price
GBX 2,888.20
Economic Moat
Yqrdpdh
Capital Allocation
Mxyjxmr

Bulls Say, Bears Say

Bulls

Smith & Nephew participates in the fast-growing sports medicine arena thanks to its extensive arthroscopy portfolio.

Bears

Smith & Nephew's attempted shift to the lower-cost Syncera distribution model in the U.S. was disappointing, which leaves the firm in a tenuous competitive position for large joint replacement.

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News

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Trading Information

Previous Close Price
GBX 1,140.00
Day Range
GBX 1,132.00–1,145.50
52-Week Range
GBX 887.00–1,245.26
Bid/Ask
GBX 0.00 / GBX 1,200.00
Market Cap
GBX 991.43 Bil
Volume/Avg
4.7 Mil / 2.3 Mil

Key Statistics

Price/Earnings (Normalized)
15.17
Price/Sales
2.22
Dividend Yield (Trailing)
2.59%
Dividend Yield (Forward)
2.59%
Total Yield
2.59%

Company Profile

Smith & Nephew designs, manufactures, and markets orthopedic devices, sports medicine and arthroscopic technologies, and wound-care solutions. Roughly 41% of the U.K.-based firm's revenue comes from orthopedic products, and another 30% is sports medicine and ENT. The remaining 29% of revenue is from the advanced wound therapy segment. Roughly half of Smith & Nephew's total revenue comes from the United States, just over 30% is from other developed markets, and emerging markets account for the remainder.
Sector
Healthcare
Industry
Medical Devices
Stock Style Box
Mid Core
Total Number of Employees
18,000
Website
https://www.smith-nephew.com

Competitors

Valuation

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Metric
SN.
JNJ
SYK
Price/Earnings (Normalized)
 15.1715.2931.28
Price/Book Value
 2.415.396.77
Price/Sales
 2.224.556.31
Price/Cash Flow
 13.2117.3029.81
Price/Earnings
SN.
JNJ
SYK

Financial Strength

Metric
SN.
JNJ
SYK
Quick Ratio
 1.110.770.81
Current Ratio
 2.511.071.68
Interest Coverage
 3.0924.4512.28
Quick Ratio
SN.
JNJ
SYK

Profitability

Metric
SN.
JNJ
SYK
Return on Assets (Normalized)
 7.37%13.17%11.13%
Return on Equity (Normalized)
 14.30%32.42%23.26%
Return on Invested Capital (Normalized)
 10.12%20.93%14.77%
Return on Assets
SN.
JNJ
SYK

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Name
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Morningstar Rating for Stocks
Capital Allocation
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Market Cap
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STE
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ZBH
KlyrzsbfMlr$21.3 Bil
 Insulet Corp
PODD
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