Fact based stock research
Smith & Nephew (LSE:SN.)

GB0009223206

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Smith & Nephew stock research in summary

smith-nephew.com

ANALYSIS: With an Obermatt Combined Rank of 53 (better than 53% compared with investment alternatives), Smith & Nephew (Health Care Equipment, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Smith & Nephew are a good value (attractively priced) with a consolidated Value Rank of 87 (better than 87% of alternatives), are safely financed (Safety Rank of 55, which means low debt burdens), but show below-average growth (Growth Rank of 15). ...read more

RECOMMENDATION: A Combined Rank of 53, is a buy recommendation based on Smith & Nephew's financial characteristics. As the company Smith & Nephew's key financial metrics exhibit good value (Obermatt Value Rank of 87) but low growth (Obermatt Growth Rank of 15) while being safely financed (Obermatt Safety Rank of 55), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 87% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	87
Growth Rank	15
Safety Rank	55
Combined Rank	53

Country	United Kingdom
Industry	Health Care Equipment
Index	FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Robotics
Size class	X-Large

This stock has achievements: Gold Winner CEO, Insight 2016-04-01, Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Smith & Nephew

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	84	95	89	87
GROWTH
GROWTH	53	23	47	15
SAFETY
SAFETY	64	34	54	55
SENTIMENT
SENTIMENT	n/a	7	61	^new
360° VIEW
360° VIEW	n/a	23	76	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 29-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Smith & Nephew is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	84	95	89	87
GROWTH
GROWTH	53	23	47	15
SAFETY
SAFETY	64	34	54	55
COMBINED
COMBINED	77	53	88	53

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Smith & Nephew the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 87 (better than 87% compared with alternatives) for 2024, Smith & Nephew shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Smith & Nephew. Price-to-Sales is 59 which means that the stock price compared with what market professionals expect for future sales is lower than for 59% of comparable companies, indicating a good value for Smith & Nephew's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 89% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 67. Compared with other companies in the same industry, dividend yields of Smith & Nephew are expected to be higher than for 90% of all competitors (a Dividend Yield rank of 90). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 87, is a buy recommendation based on Smith & Nephew's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Smith & Nephew based on its detailed value metrics. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	68	68	62	59
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	80	84	84	89
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	62	74	66	67
DIVIDEND YIELD
DIVIDEND YIELD	62	80	84	90
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	84	95	89	87

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Smith & Nephew; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), Smith & Nephew shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Smith & Nephew. Sales Growth has a rank of 19, which means that currently professionals expect the company to grow less than 81% of its competitors. The same is valid for Profit Growth, with a rank of 24, and Capital Growth with 37. In addition, Stock Returns have a below market rank of 37, which means that the stock returns have recently been below 63% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	48	33	24	19
PROFIT GROWTH
PROFIT GROWTH	42	35	42	24
CAPITAL GROWTH
CAPITAL GROWTH	n/a	67	76	37
STOCK RETURNS
STOCK RETURNS	28	9	45	37
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	53	23	47	15

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Smith & Nephew.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Smith & Nephew has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Smith & Nephew is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Smith & Nephew. Refinancing is at 73, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 73% of its competitors. Liquidity is also good at 53, meaning the company generates more profit to service its debt than 53% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 38, which means the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Smith & Nephew has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Smith & Nephew could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Smith & Nephew and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	35	26	38	38
REFINANCING
REFINANCING	81	65	71	73
LIQUIDITY
LIQUIDITY	55	39	43	53
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	64	34	54	55

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Smith & Nephew and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	29	62	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	46	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	30	66	^new
MARKET PULSE
MARKET PULSE	n/a	30	40	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	7	61	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Smith & Nephew.
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