Citi has stuck with its ‘buy’ call on Smith & Nephew PLC (LSE:SN) after the company delivered quarterly results that were, in Citi’s words, “meaningfully better than expected”, and announced a $500mn share buyback that caught many by surprise.
In its latest note, it highlighted that Smith & Nephew’s organic growth for the second quarter came in “200–250 basis points above Visible Alpha consensus" and its own forecasts, driven by strong performances across the board.
The bank pointed to standout growth in joint repair, advanced wound biologics, and hips.
S&N has kept its 2025 outlook unchanged, still aiming for solid sales growth and a stronger operating margin, even after accounting for $15–20mn in tariffs.
The buyback, which Citi says most investors were not expecting, “implies approximately 4% annualised earnings per share accretion at the current share price”.
It summed up the first half as “meaningfully better-than-expected, with little to complain about”, picking out the “continued momentum in US Orthopaedics, especially hips,” and “mostly positive performance elsewhere.”
The bank said this strong start to the year gives the full-year margin target firmer ground, with the buyback adding another reason for optimism.
After a strong rise on Tuesday, the stock added a further 0.7% to 1,340.18p.