UBS gave a leg-up to Smith & Nephew PLC (LON:SN.) shares on Wednesday after upgrading its rating for the orthopaedic products group to ‘buy’ from ‘neutral’, highlighting its robotic systems.
The Swiss bank also raised its target price for the FTSE 100-listed stock to 1,550p, up from 1,385p, with the shares currently changing hands at 1,347p, up 2.3% on Tuesday’s close.
READ: Smith & Nephew says former Alere boss, Namal Nawana to join as chief executive from next month
In a note to clients, UBS’s analysts said: “Our 200 surgeon UBS Evidence Lab survey suggests the industry shift towards robotic systems is both rapid and inevitable, allowing Smith & Nephew to take share from those yet to launch a system.”
They added: “Unlike consensus, which we believe has largely overlooked S&N's Navio robot we model knee sales growth accelerating to 12% in 2020 from 5% in 2017, which helps drive group sales growth to 6% from 3%.”
The analysts lifted its earnings per share estimates for Smith & Nephew by around 10% in 2020 due to increased expectations for Navio, and the resulting operating leverage.
Surgeons’ accreditation
Meanwhile, in its own announcement today, Smith & Nephew revealed that its centre in Watford is the first commercial surgical training facility in Europe to be accredited by the UK Royal College of Surgeons.
The company said this accreditation for its expert connect centre is "the gold standard", and follows an in-depth assessment by the College.
Massimiliano Colella, Smith & Nephew’s president of Europe & Canada said: "This endorsement from the Royal College of Surgeons is a huge honour and recognition of the quality of our medical training and education.”