SNN changes
Pick any two versions below to diff them.
- Price
- $29.06 → $31.04(+6.8%)
- Discount category
- Well below intrinsic value → Below intrinsic value
- Next earnings
- Nov 4, 2026 → Mar 1, 2027
- About
- Smith+Nephew is a British medical technology company. It has three business units. Orthopaedics sells knee and hip implants and related products. Sports Medicine & ENT sells implants and instruments for joint repair, such as shoulder anchors and the REGENETEN implant, and equipment for arthroscopic surgery. Advanced Wound Management sells dressings, negative pressure wound therapy such as PICO, and bioactive products such as SANTYL and skin substitutes. Revenue was removed: $3.10 added: $4.65 billion in the first removed: half added: nine months of 2026. Surgeons train on its systems and hospitals keep its instruments and implant sets, which makes it costly for them to change suppliers. The company trades on the London Stock Exchange, and its American depositary shares (SNN) trade on the NYSE.
- Thesis
- The market prices Smith+Nephew for weak growth in its Orthopaedics business and for doubt that its turnaround can continue. removed: In August 2026, it added: The company cut its 2026 revenue growth outlook added: two times: to about 4% added: in August 2026 and to about 3% on November 4, 2026. In November, it also cut its 2026 guidance for trading profit growth to about 4% from about removed: 6%, added: 8% and for free cash flow to about $750 million from about $800 million, because removed: of problems in U.S. hip and knee removed: implants and lower sales removed: of SANTYL. added: stay weak. Underlying revenue grew removed: only 1.6% added: 3.4% in removed: Q2 added: Q3 2026. added: Sports Medicine & ENT grew 7.9%, but U.S. knee implant revenue fell 7.3%. The removed: CFO, John Rogers, added: company said removed: in August 2026 that removed: he will leave added: it held talks with Johnson & Johnson about its Orthopaedics business, that these talks ended, and that it continues to examine all options for that business. The CFO left on September 30, 2026, and the company has not named a successor. removed: Profit is stronger: trading profit rose 8.1% in the first half of 2026, and the trading profit margin rose to 18.3%, helped by efficiency savings. For the gap to close, three things must be true. removed: Revenue growth must rise to 5.0% to 5.5% in the second half of 2026, as the company expects. Orthopaedics must grow again in 2027 with new products such as the cementless LANDMARK removed: knee and added: knee, the CATALYSTEM removed: hip. added: hip and CORI Hip. Sports Medicine & ENT must keep its fast growth, and Advanced Wound Management must grow again. The company must meet its added: new 2026 guidance of about removed: 8% added: $1.25 billion of trading profit removed: growth excluding acquisitions and about removed: $800 added: $750 million of free cash removed: flow. The Q3 2026 trading report on November 4, 2026, added: flow, and removed: the added: give a 2027 outlook with faster growth. The full-year results removed: in February 2027 added: on March 1, 2027, give the removed: tests. added: next test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a longer weakness in U.S. Orthopaedics, where larger competitors are strong.
- Risks
- Orthopaedics growth is removed: weak, with problems in added: weak. In Q3 2026, U.S. added: knee implant revenue fell 7.3% and U.S. hip added: implant revenue fell 1.0%, and removed: knee implants added: the company expects this weakness to continue in removed: Q2 added: Q4 2026. If the new knee and hip products do not win surgeons in removed: late 2026 and 2027, the company loses more share to larger competitors. Lower U.S. sales of skin substitutes reduce revenue in Advanced Wound Bioactives. The company expects this headwind to be near the top of its range of $20 million to $40 million in 2026. The CFO left on September 30, 2026, and the company has not named a successor. Changes in the leadership team can slow the turnaround plan. added: The board examines strategic options for Orthopaedics, after talks with Johnson & Johnson ended in 2026. A sale, a combination or a long review can bring costs and take the attention of management. Tariffs on medical devices can raise costs. The company expects the net effect of tariffs to be broadly neutral in 2026 only because of tariff refunds.
- Balance sheet
- Cash: $754M Debt: $3.6B Net debt: $2.8B Net debt / EBITDA: 1.8× (low) Interest cover: 6.9× Debt due within 12 months: $508M Smith+Nephew funds itself with corporate bonds, private placement notes and bank facilities. At June 27, 2026, borrowings were $3.59 billion: $2.67 billion of corporate bonds, $410 million of private placement notes and $508 million of current bank borrowings and loans. Cash and cash equivalents were $754 million. Net debt, including lease liabilities, was $3.02 billion, up from $2.76 billion at December 31, 2025, after the purchase of Integrity Orthopaedics and share buybacks. Net debt to adjusted EBITDA was 1.8 times. The company had access to committed facilities of $4.7 billion. A $350 million bond and $140 million of private placement debt were due in the first half of 2027. In September 2026, it issued $700 million of notes due removed: 2036, redeemed the $350 million bond due 2027 added: 2036 and bought back part of its notes due removed: 2030. added: 2030, and on October 5, 2026, it redeemed the $350 million bond due 2027. Interest cover is operating profit divided by interest expense for the first half of 2026. added: The Q3 2026 trading report of November 4, 2026, gives no new balance sheet. In it, the company expects free cash flow of about $750 million for 2026, and $250 million of the $500 million buyback was complete at the end of Q3. As of Jun 27, 2026.
- Checkpoints
- Nov 4, 2026: Q3 2026 trading report: return to faster growth. removed: Pending. added: Failed. Watch: Underlying revenue growth near 5% with better U.S. Orthopaedics and SANTYL growth, and the 2026 guidance kept, pass; growth near 2% or a cut to profit guidance fails. removed: Feb 2027 (estimate): added: Outcome: Underlying revenue growth was 3.4%, below the 5% test, U.S. knee implant revenue fell 7.3%, and the company cut its 2026 trading profit growth guidance to about 4% from about 8%. Mar 1, 2027: Full-year 2026 results and 2027 outlook. Pending. Watch: Trading profit removed: growth added: near the new guidance of about removed: 8% excluding acquisitions, added: $1.25 billion, free cash flow near removed: $800 added: $750 million and a 2027 outlook for Orthopaedics growth pass; a miss or a weak outlook fails.
- Recent events
- added: Nov 4, 2026: Smith+Nephew published its Q3 2026 trading report. Revenue was $1,551 million, with underlying growth of 3.4%. Sports Medicine & ENT grew 7.9%, Orthopaedics grew 2.5% and Advanced Wound Management fell 0.2%, and U.S. knee implant revenue fell 7.3%. The company cut its 2026 guidance to underlying revenue growth of about 3%, trading profit growth of about 4%, or about $1.25 billion, and free cash flow of about $750 million. It said that it approached Johnson & Johnson about its Orthopaedics business earlier in 2026 and that the talks have ended. By the end of Q3, $250 million of the $500 million buyback was complete. Full-year results are due on March 1, 2027. Oct 8, 2026: Smith+Nephew said it will publish its Q3 2026 trading report on November 4, 2026. added: Oct 5, 2026: Smith+Nephew redeemed all of its $350 million of 5.150% notes due 2027, at 100.245% of their principal amount. Sep 22, 2026: Smith+Nephew received FDA 510(k) clearance for its LANDMARK Total Knee System, and surgeons completed the first cases. It plans a phased launch, with broader availability across markets during 2027. Sep 18, 2026: Smith+Nephew said it will redeem its $350 million of 5.150% notes due 2027. On September 16, 2026, it announced the results of a cash tender offer for up to $250 million of its 2.032% notes due 2030. Sep 10, 2026: Smith+Nephew priced an issue of $700 million of 5.750% notes due 2036. Aug 19, 2026: Smith+Nephew said that CFO John Rogers will leave on September 30, 2026, to take an external position in the U.S. He stepped down from the board at once, and the company started a search for his successor. Pierre Palassian, Senior Vice President Finance and Group Controller, is interim CFO until the company appoints a successor. Aug 4, 2026: Smith+Nephew reported Q2 and first half 2026 results. Q2 revenue was $1,597 million, with underlying growth of 1.6%. First half trading profit rose 8.1% to $566 million and adjusted EPS rose 11.0% to 47.7 cents. The company cut its 2026 revenue growth outlook to about 4% from about 6%, but kept its guidance for about 8% trading profit growth and about $800 million of free cash flow. The interim dividend rose 4.0% to 15.6 cents. May 6, 2026: Smith+Nephew started a $500 million share buyback program. By August 3, 2026, $216 million of it was settled.