Smith & Nephew Ripe for Takeover Bid say Analysts

As the market moves gradually toward more vendor consolidation, equity analysts say they would not be surprised to see Smith & Nephew pair up with another competitor

Debbie S. Wang 20 October, 2015 | 12:30PM
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Smith & Nephew's (SP.) impressive innovation has allowed the firm to carve out a slice of the orthopaedic and wound-care markets. Though Smith & Nephew is smaller than the dominant orthopaedic competitors, it has been a strong contributor in terms of introducing meaningful innovation. The firm pioneered hip resurfacing, which enlarged the patient pool by giving people in their late forties and early fifties an option to address their worsening hips instead of waiting until a full-blown hip replacement was appropriate.

The company's relatively small size could leave it vulnerable

Smith & Nephew pioneered its knee replacement with Verilast technology, which the firm contends can last for 30 years. Again, this technology helps Smith & Nephew attract younger patients, as well as any patients concerned about the prospect of revision replacement down the road. These are significant improvements that exceed the evolutionary innovation typically seen in orthopedics.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Smith & Nephew PLC1,294.50 GBX-1.18Rating

About Author

Debbie S. Wang  Debbie S. Wang is a senior analyst with Morningstar.