ZBH - Smith & Nephew initiated at outperform at RBC on revenue growth and margins

RBC Capital Markets has initiated Smith & Nephew (SNN +3.3%) with an outperform rating, citing the medical device company's potential acceleration in revenue growth and margins. The firm has a GBP1700 price target (41% upside based on Tuesday's close). Analyst Jack Reynolds-Clark said that the company has a strong position in sports medicine and ambulatory service centers, both of which are high growth areas. He added that Smith & Nephew (SNN +3.3%) should also benefit from its differentiated surgical robot and cementless knee portfolio. The company's current state "provides an opportunity to build a major position in a major medtech company at a historically low entry point," Reynolds-Clark wrote. He noted that the company should trade at a premium to Zimmer Biomet (ZBH +1.9%) and a discount to Stryker (SYK +2.6%). Read why Seeking Alpha contributor Retirement Pot says that Smith & Nephew (SNN +3.3%) is a buy.

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Smith & Nephew initiated at outperform at RBC on revenue growth and margins