Wright Medical Group (WMGI): Notes From The Road - Jefferies
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Jefferies analyst, Raj Denhoy, reiterated his Buy rating on shares of Wright Medical (NASDAQ: WMGI) after the analyst hosted WMGI management for a series of investor meetings. The focus was not entirely on the recent progress in settling litigation but also on the underlying business, a piece of the story that the analyst believes is still underappreciated. There are few if any other companies in medtech with revenues of $700mn that are consistently growing in the mid-teens and he believes the outlook remains very encouraging.
Wright continues to highlight 20% growth it is seeing in US shoulders which compares to underlying market growth that is tracking closer to 9%. Total upper extremity growth was 17%. Two key growth contributors are the continued adoption of the company’s legacy Ascent shoulder as well as the new Simpliciti system. Simpliciti is bone sparing (the only such device on the market in the US currently) and offers the potential to not only drive share gains but also expand the market into younger patients.
WMGI is a top pick at Jefferies and the price target of $29 is based on 5x EV/2017 sales.Wright Medical Group (NASDAQ: WMGI)
Shares of Wright Medical closed at $24.14 yesterday.
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