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.
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.