Smith & Nephew plc

DB:NPW1 Stock Report

Market Cap: €10.4b

Smith & Nephew Valuation

Is NPW1 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of NPW1 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NPW1 (€11.88) is trading below our estimate of fair value (€20.34)

Significantly Below Fair Value: NPW1 is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NPW1?

Key metric: As NPW1 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for NPW1. This is calculated by dividing NPW1's market cap by their current earnings.
What is NPW1's PE Ratio?
PE Ratio36.1x
EarningsUS$305.00m
Market CapUS$11.01b

Price to Earnings Ratio vs Peers

How does NPW1's PE Ratio compare to its peers?

The above table shows the PE ratio for NPW1 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average22x
AFX Carl Zeiss Meditec
25.8x16.3%€5.2b
SHL Siemens Healthineers
29.4x14.2%€57.1b
DRW3 Drägerwerk KGaA
7.2x2.0%€789.2m
EUZ Eckert & Ziegler
25.6x5.9%€918.9m
NPW1 Smith & Nephew
36.1x22.5%€8.7b

Price-To-Earnings vs Peers: NPW1 is expensive based on its Price-To-Earnings Ratio (36.1x) compared to the peer average (22x).

Price to Earnings Ratio vs Industry

How does NPW1's PE Ratio compare vs other companies in the European Medical Equipment Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
NPW1 36.1xIndustry Avg. 29.8xNo. of Companies8PE01632486480+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: NPW1 is expensive based on its Price-To-Earnings Ratio (36.1x) compared to the European Medical Equipment industry average (29.7x).

Price to Earnings Ratio vs Fair Ratio

What is NPW1's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NPW1 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio36.1x
Fair PE Ratio31.5x

Price-To-Earnings vs Fair Ratio: NPW1 is expensive based on its Price-To-Earnings Ratio (36.1x) compared to the estimated Fair Price-To-Earnings Ratio (31.5x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst NPW1 forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€11.88
€15.31
+29.0%
12.4%€18.25€12.49n/a18
Nov ’25€11.43
€15.23
+33.3%
12.7%€17.82€12.00n/a18
Oct ’25€13.82
€15.48
+12.1%
11.2%€17.74€12.38n/a18
Sep ’25€13.89
€15.32
+10.4%
10.5%€17.22€12.39n/a18
Aug ’25€14.13
€15.38
+8.9%
10.4%€17.75€12.81n/a18
Jul ’25€11.58
€15.29
+32.1%
10.9%€17.86€12.50n/a17
Jun ’25€11.62
€15.07
+29.7%
12.5%€19.01€12.32n/a17
May ’25€11.48
€15.37
+34.0%
11.6%€19.31€12.52n/a17
Apr ’25€11.72
€15.30
+30.6%
11.2%€19.14€12.59n/a18
Mar ’25€12.31
€15.40
+25.1%
10.5%€19.06€12.53n/a18
Feb ’25€12.98
€15.21
+17.2%
11.1%€18.72€11.89n/a18
Jan ’25€12.36
€14.69
+18.9%
12.1%€18.38€11.67n/a18
Dec ’24€11.87
€14.89
+25.5%
11.7%€18.58€11.80n/a18
Nov ’24€10.56
€15.91
+50.7%
12.2%€19.05€11.72€11.4315
Oct ’24€11.70
€16.63
+42.1%
9.9%€19.26€13.85€13.8214
Sep ’24€12.42
€16.39
+32.0%
8.0%€18.85€13.57€13.8915
Aug ’24€13.74
€16.35
+19.0%
10.6%€18.72€12.04€14.1315
Jul ’24€14.43
€16.30
+13.0%
10.5%€18.50€12.11€11.5815
Jun ’24€14.00
€16.50
+17.9%
11.6%€18.82€11.22€11.6215
May ’24€14.57
€15.44
+6.0%
15.3%€18.46€9.37€11.4816
Apr ’24€12.50
€14.62
+17.0%
14.8%€18.00€9.43€11.7216
Mar ’24€13.45
€15.01
+11.6%
13.8%€17.88€9.64€12.3115
Feb ’24€12.60
€14.72
+16.8%
15.7%€17.55€9.46€12.9814
Jan ’24€12.30
€14.50
+17.9%
16.4%€17.94€9.67€12.3614
Dec ’23€12.60
€14.63
+16.1%
16.0%€18.47€9.96€11.8713
Nov ’23€12.05
€15.54
+28.9%
14.5%€19.30€10.41€10.5613

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

Discover undervalued companies

Shandong Weigao Group Medical Polymer

HK$20.6b

Engages in the research and development, production, wholesale, and sale of medical devices in the People’s Republic of China.

UK2

HK$0.53

7D

1.0%

1Y

-34.2%

LNA Santé

€234.2m

Engages in the management and operation of health establishments.

2N3

€22.30

7D

-4.9%

1Y

16.8%

Top Glove Corporation Bhd

RM 7.8b

An investment holding company, manufactures, trades in, and sells gloves in Malaysia, Thailand, the People’s Republic of China, and internationally.

5OU

RM 0.98

7D

0.5%

1Y

-82.5%