Jefferies Remains Bullish as Metal-on-Metal Hips Threaten Wright Medical Group (WMGI)

Jefferies reiterated a Buy rating and $29.00 price target as Wright Medical (NASDAQ: WMGI) faces liability for metal-on metal hip system. Wright is the latest orthopedic company to face its day of reckoning over metal-on-metal hips. The others have all reached settlements in the range of $250k per case. Wright has been in mediation with its insurers since May and a resolution is expected on the issue soon.

Analyst Raj Denhoy commented, "Metal-on-metal hips have come back to haunt WMGI. We cover what we know and what we don’t below, but the sheer number of variables at play makes the timing and eventual monetary cost to WMGI to settle its liability nearly impossible to estimate. However, conversations with a legal consultant as well as precedent cases suggest that insurance will cover the majority of any settlement. We believe WMGI’s liability will be manageable and we maintain a Buy rating."

For an analyst ratings summary and ratings history on Wright Medical click here. For more ratings news on Wright Medical click here.

Shares of Wright Medical closed at $17.04 yesterday.

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