Smith & Nephew PLC (LON:SN. will be among Thursday’s blue-chip highlights, as the medical technology group serves up its final results for 2016.
David Adlington, analyst at JP Morgan Cazenove, expects to see a weaker fourth quarter (partly because of having four fewer trading days) and in a recent note highlighted certain foreign exchange headwinds.
The analyst, meanwhile, pointed also to a generally better than expected reporting across the sector and noted positives from rivals Zimmer and Stryker.
Earlier this week, Adlington said: “We update our FY17 revenue forecasts for the latest FX rates, which leads to small downgrades given c2% headwinds.
“Bloomberg consensus does not appear to have captured this headwind – it is looking for c3% reported growth, and 5% underlying growth is unlikely in our view (9m 2016 + what is less clear is the impact of these moves on margins (once the hedges roll off)).
“We believe we are likely to get some further colour at these results, but this likely represents an additional small downside risk given consensus is looking for c50bp of margin expansion.”
JP Morgan has a ‘neutral’ rating for Smith & Nephew, and a £12.60 price target (current price: £12.11).
Thursday’s Agenda
Interim Results: Innovaderma Plc (LON:IDP), Frontier Developments Plc (LON:FDEV), Ashmore group PLC (LON:ASHM).
Final Results: Smith & Nephew PLC (LON:SN.), Henderson Group PLC (LON:HGG)
Trading Statements: Tate & Lyle PLC (LON:TATE), Thomas Cook Group PLC (LON:TCG), Pennon Group plc (LON:PNN), Grainger PLC (LON:GRI), Enterprise Inns PLC (LON:ETI), Dairy Crest Group PLC (LON:DCG).