Smith & Nephew keeps Jefferies 'buy' despite H2 growth scepticism

Smith & Nephew PLC ( LSE:SN ) View Price & Profile Smith & Nephew keeps Jefferies 'buy' despite H2 growth scepticism Published: 15:00 04 Sep 2026 BST Smith & Nephew PLC (LSE:SN) drew a cautious assessment from Jefferies on Friday, with the broker maintaining its 'buy' rating despite investor scepticism over execution and a reduced financial year 2026 guidance. Shares in the company traded around 1,059p as Jefferies held its 1,500p price target, citing an all-time low valuation of 12 times estimated 2027 earnings alongside lumpy operational execution. At the heart of the update is investor scepticism about delivering 5.0%-5.5% organic sales growth in the second half, following 2.3% in the first half. That acceleration is needed to meet a lower 4% financial year target, down from 6% previously, with market consensus already pricing in a miss of 3.6%. Adding to investor anxiety, the unexpected departure of the chief financial officer has created an unwelcome distraction , with Jefferies noting that Baxter's offer was 'difficult to ignore'. Regulatory headwinds include CMS reimbursement and billing changes affecting skin substitutes, as well as WISeR-related claims friction, which have slowed utilisation. Smith & Nephew now expects the impact to reach the upper end of a $20 million to $40 million headwind to trading profit. Alongside China's volume-based procurement programme in AET and ENT, Jefferies views the group as a relative safe haven, although tariffs will weigh by about $60 million given 2026 refunds. With activist shareholder Cevian holding above 14%, Jefferies noted all portfolio options remain on the table, including a potential orthopaedics sale or spin-off, with the board considering potential dis-synergies with Sports Medicine and tax implications. A key early-2027 catalyst is MediWound's...