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Smith & Nephew shares rally slightly despite a Deutsche Bank downgrade after results disappointment

The German bank’s analysts cut their stance on the FTSE 100-listed artificial hips and knees maker to ‘sell’ from ‘hold’ and reduced their target price to 1,200p from 1.315p
Knees x-ray
Smith & Nephew shares slumped by around 8% yesterday after it reported flat underlying revenue for the first three months of the year

Smith & Nephew PLC (LON:SN.) shares edged higher on Friday following big falls after disappointing first-quarter results in the previous session, despite a downgrade in rating by Deutsche Bank.

The German bank’s analysts cut their stance on the FTSE 100-listed artificial hips and knees maker to ‘sell’ from ‘hold’ and reduced their target price for the stock to 1,200p from 1.315p.

READ: Smith & Nephew cuts full year revenue guidance after weaker first quarter

In a note to clients, they said: “We expect shares in S&N to de-rate from ~19x 1-yr fwd P/E to ~17x 1-yr fwd P/E.

“This reflects our view that the company can only deliver low single-digit earnings growth and that the visibility of this growth may reduce further.”

Smith & Nephew shares slumped by around 8% yesterday after it reported flat underlying revenue for the first three months of the year, well below analysts’ expectations for growth of 1.6%.

However, in late morning trading on Friday, the shares edged up 0.2% to 1,304.5p.

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