Smith & Nephew PLC (LSE:SN) rose as much as 7% in afternoon trading on Wednesday after the medical technology group reported stronger-than-expected revenue growth in the first quarter of 2025.
The London-listed company posted underlying revenue growth of 3.1% in the three months to March, ahead market consensus of 1.9%. The result also exceeded Smith & Nephew’s guidance of 1% to 2% growth.
Panmure Liberum, which had predicted growth of 2.3%, described the trading update as “better than expected, both in terms of revenue growth and the impact of tariffs”.
The broker maintained its 'hold' rating on the stock with a price target of 1,090p, noting continued uncertainty about the group’s ability to sustain growth in the US orthopaedics market.
Revenue from that division and sports medicine slightly outperformed expectations, while advanced wound management came in below forecasts, with volatility in SANTYL sales cited as a contributing factor.
In the US, sales of knee and hip implants rose by 2.5% and 3.6%, respectively, after adjusting for selling days, suggesting the business has maintained the momentum seen in the final quarter of 2024.
Smith & Nephew held full-year guidance for underlying revenue growth of around 5% and a trading margin of 19% to 20%, despite absorbing a net tariff impact of up to $20 million.
Panmure Liberum noted that the performance of sector peers such as Stryker and Zimmer Biomet, which have not yet reported, would be important in gauging Smith & Nephew’s relative progress. However, it concluded that “the headlines look encouraging”.
The stock was up 65p at 1,061p.