Smith & Nephew plc

LSE:SN. Stock Report

Market Cap: UK£8.5b

Smith & Nephew Valuation

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

Valuation Score

4/6

Valuation Score 4/6

  • 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 SN. when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SN. (£9.76) is trading below our estimate of fair value (£16.22)

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

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for SN.. This is calculated by dividing SN.'s market cap by their current earnings.
What is SN.'s PE Ratio?
PE Ratio35.3x
EarningsUS$305.00m
Market CapUS$10.74b

Price to Earnings Ratio vs Peers

How does SN.'s PE Ratio compare to its peers?

The above table shows the PE ratio for SN. vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average27.1x
NIOX NIOX Group
23.6x17.1%UK£258.7m
CTEC ConvaTec Group
38.9x20.5%UK£4.8b
EKF EKF Diagnostics Holdings
23.9xn/aUK£117.7m
MDC Mediclinic International
21.9x10.7%UK£3.7b
SN. Smith & Nephew
35.3x22.5%UK£8.5b

Price-To-Earnings vs Peers: SN. is expensive based on its Price-To-Earnings Ratio (35.3x) compared to the peer average (28.8x).

Price to Earnings Ratio vs Industry

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

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
SN. 35.3xIndustry Avg. 29.1xNo. of Companies7PE01632486480+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: SN. is expensive based on its Price-To-Earnings Ratio (35.3x) compared to the European Medical Equipment industry average (29.1x).

Price to Earnings Ratio vs Fair Ratio

What is SN.'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.

SN. PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio35.3x
Fair PE Ratio41.9x

Price-To-Earnings vs Fair Ratio: SN. is good value based on its Price-To-Earnings Ratio (35.3x) compared to the estimated Fair Price-To-Earnings Ratio (41.9x).

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 SN. forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£9.76
UK£12.47
+27.8%
12.4%UK£14.84UK£10.15n/a18
Nov ’25UK£9.67
UK£12.78
+32.1%
12.7%UK£14.94UK£10.06n/a18
Oct ’25UK£11.63
UK£12.92
+11.1%
11.2%UK£14.81UK£10.33n/a18
Sep ’25UK£11.71
UK£13.06
+11.5%
10.5%UK£14.68UK£10.56n/a18
Aug ’25UK£11.99
UK£13.02
+8.6%
10.4%UK£15.03UK£10.85n/a18
Jul ’25UK£9.76
UK£12.94
+32.7%
10.9%UK£15.13UK£10.59n/a17
Jun ’25UK£9.90
UK£12.82
+29.5%
12.5%UK£16.18UK£10.48n/a17
May ’25UK£9.77
UK£13.15
+34.7%
11.6%UK£16.53UK£10.71n/a17
Apr ’25UK£9.92
UK£13.08
+31.9%
11.2%UK£16.36UK£10.76n/a18
Mar ’25UK£10.48
UK£13.18
+25.8%
10.5%UK£16.32UK£10.73n/a18
Feb ’25UK£10.97
UK£12.97
+18.2%
11.1%UK£15.96UK£10.13n/a18
Jan ’25UK£10.79
UK£12.74
+18.1%
12.1%UK£15.94UK£10.12n/a18
Dec ’24UK£10.36
UK£12.84
+24.0%
11.7%UK£16.02UK£10.17n/a18
Nov ’24UK£9.23
UK£13.88
+50.3%
12.2%UK£16.62UK£10.22UK£9.6715
Oct ’24UK£10.23
UK£14.41
+40.9%
9.9%UK£16.69UK£12.00UK£11.6314
Sep ’24UK£10.65
UK£14.07
+32.1%
8.0%UK£16.17UK£11.65UK£11.7115
Aug ’24UK£11.77
UK£14.06
+19.5%
10.6%UK£16.10UK£10.35UK£11.9915
Jul ’24UK£12.68
UK£14.01
+10.5%
10.5%UK£15.90UK£10.41UK£9.7615
Jun ’24UK£12.02
UK£14.26
+18.7%
11.6%UK£16.27UK£9.70UK£9.9015
May ’24UK£13.15
UK£13.56
+3.2%
15.3%UK£16.21UK£8.23UK£9.7716
Apr ’24UK£11.22
UK£12.87
+14.7%
14.8%UK£15.84UK£8.30UK£9.9216
Mar ’24UK£11.98
UK£13.32
+11.2%
13.8%UK£15.86UK£8.55UK£10.4815
Feb ’24UK£11.24
UK£12.90
+14.8%
15.7%UK£15.39UK£8.30UK£10.9714
Jan ’24UK£11.10
UK£12.47
+12.4%
16.4%UK£15.43UK£8.32UK£10.7914
Dec ’23UK£10.79
UK£12.65
+17.3%
16.0%UK£15.96UK£8.60UK£10.3613
Nov ’23UK£10.24
UK£13.36
+30.6%
14.5%UK£16.60UK£8.95UK£9.2313

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

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