Jefferies Analyzes Medical Technology & Hospital Supplies (SNN, SMA, WMGI)

Piper Jaffray is out this morning with a research report on the Medical Technology and Hospital Supplies industry sectors, focusing on Smith & Nephew SNN, Symmetry Medical SMA, and Wright Medical Group WMGI. In the report, Piper Jaffray rated Smith & Nephew Neutral with a price target of $53, rated Symmetry Medical Overweight with a price target of $11, and rated Wright Medical Group Overweight with an $18 price target. In the report, Piper Jaffray states, "Looking ahead to next week's results from SNN and WMGI, which represent the bulk of the remaining 20% of the ortho market yet to report Q4 results, we see more risk than reward. On one hand, SYK and ZMH (~45% of the market), delivered upside to growth in Q4 (130 bps and 380 bps above expectations, respectively). On the other hand, JNJ and Biomet (~35% of the market) showed surprisingly weak Q4 growth results (620 bps and 480 bps below expectations, respectively). Although the bar is low, toughening commentary regarding metal-on-metal from JNJ and Biomet could have implications for both stocks. We remain bullish on WMGI over 12 months but recommend caution around the quarter for both SNN and WMGI as we see risk to the numbers and a lack of visibility given the challenging cross-currents impacting ortho at the moment."