BofA Merrill Lynch lifts Smith & Nephew price target

Despite the share price recovery of around 20% since October’s 10-year low, the bank thinks Smith & Nephew remains one of the few value opportunities in EU MedTech, with potential upside since the share price remains around 10% below the Covid trough.

"While the Orthopaedics challenges have been a big overhang for the equity story, we are now seeing some light at the end of the tunnel: Supply chain has improved, and efforts are focused on sales reps’ efficiency," it said.

"As we start to see normalisation, we look at several opportunities for Ortho. CORI robot, cementless mix shift and the AETOS shoulder could all contribute materially to group sales and profits."

Finally, BofA said its reverse sum-of-the-parts suggests no value for the Ortho business in S&N’s current market value, which it reckons is unfair.

The bank maintained its 'buy' rating on the stock.

At 1245 GMT, the shares were up 1.9% at 1,085p.