Berenberg Downgrades Smith & Nephew (SNN) to Hold
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Berenberg downgraded Smith & Nephew (NYSE: SNN) from Buy to Hold with a GBP13.40 price target.
Analyst Tom Jones commented, "Smith & Nephew has gradually de-emphasised its slower growth areas and implemented various cost-savings measures, reinvesting the proceeds in faster growth areas of the business. However, the success of this strategy has been largely offset by various missteps and one-off headwinds, a trend we expect to continue. We have therefore become more cautious about the organic revenue growth outlook for the company, as well as on margins and earnings growth. We do expect accelerating earnings growth in 2017E, to 12% in fact, but 3ppt of this is dependant on an as yet unannounced buyback and is far from certain. Hence we no longer expect a large enough inflection in earnings growth of sufficient quality to drive the stock higher and reduce our rating to Hold."
Shares of Smith & Nephew closed at $32.44 yesterday.
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