Stock Price & Analysis

Based on the analysis of Smith & Nephew's (SNN) stock, considering both technical indicators and fundamental factors, it is advisable to hold the stock at this time. The stock shows signs of being overbought with an RSI of 71.51 and Stochastic Oscillator at 89.40, suggesting a potential pullback. Additionally, the company's strategic considerations, including possible restructuring of its orthopedics division, introduce uncertainty that could impact the stock price in the short term.

The price prediction for SNN stock in 2025 is around $32, driven by potential restructuring benefits and positive analyst sentiment. However, if growth doesn't improve, the price could be limited to $28.

The S1 support level for SNN Stock is $28.5 ,The R1 resistant level for SNN Stock is $30.2.

As of the end of day on 2025-03-17, the price of SNN Stock was $28.7.

The target price for SNN Stock according to analyst rating is 28.47, with the highest price target at 30.70 and the lowest at 27.00. Analysts have a Moderate Buy rating on SNN Stock overall.

The market cap of SNN is $25.0B.

Analysis and Insights

Smith & Nephew (SNN) appears to be overvalued based on several key metrics and recent developments:

1. Valuation Metrics:

   • P/E Ratio: SNN's P/E ratio of 29.5 is significantly higher than the industry average, indicating a premium valuation compared to its earnings.
   • EV/EBITDA: The EV/EBITDA ratio of 14.8 is also elevated, suggesting the stock is pricey relative to its earnings before interest, taxes, depreciation, and amortization.
   • Price/Sales (PS) Ratio: At 2.4, this metric is higher than the industry average, signaling that investors are paying more per dollar of revenue.
   • Price/Book (PB) Ratio: The PB ratio of 4.8 is well above the industry average, indicating the stock is expensive relative to its book value.

2. Recent Developments:

   • Strategic Shift: SNN is considering a potential breakup of its orthopedics division due to activist pressure, which reflects underlying challenges in its business segments.
   • Financial Performance: While revenue and net income have seen growth, the margins and profitability metrics do not fully justify the current valuation levels.

3. Market Sentiment:

   • Analyst Ratings: The stock has a consensus Moderate Buy rating, but some analysts have maintained a Hold rating, citing concerns about growth sustainability and valuation.

Conclusion:

Based on the elevated valuation metrics and strategic challenges, Smith & Nephew (SNN) appears overvalued at current levels. Investors may want to exercise caution or wait for a correction before considering a purchase.

Smith & Nephew plc is a portfolio medical technology company. The Company is engaged in developing, manufacturing, marketing, and selling medical devices and services. It is focused on the repair, regeneration, and replacement of soft and hard tissue. Its segments include Orthopaedics, Sports Medicine & ENT and Advanced Wound Management. Its Orthopaedics segment includes a range of hip and knee Implants used to replace diseased, damaged or worn joints, robotics-assisted and digital enabling technologies and services that help surgeons, and trauma products used to stabilize severe fractures and correct hard tissue deformities. Its Sports Medicine & Ear, Nose and Throat (ENT) businesses offer advanced products and instruments used to repair or remove soft tissue. Its Advanced Wound Management portfolio provides a comprehensive set of products to meet broad and complex clinical needs, and to help healthcare professionals reduce the human and economic consequences of wounds.

The price prediction for SNN stock by 2030 is $45 per share, driven by potential strategic restructuring and improved performance in its orthopedics division.

• Bullish Case: If Smith & Nephew successfully addresses activist pressure and turns around its orthopedics division, the stock could rise significantly, reaching $45 by 2030.
• Bearish Case: If restructuring fails and growth stagnates, the stock may trade sideways or decline to $25 per share.

Current technical indicators like RSI (68-72) and MACD (1.23) suggest moderate bullish momentum, while Fibonacci levels indicate support at $28.05 and resistance at $30.21.

SNN has a total of 18452 employees.