Broker snap: Citi downgrades Smith & Nephew after solid run

13th Aug 2013 09:25

Citigroup has cut its rating for medical devices maker Smith & Nephew from 'buy' to 'neutral', saying that the stock's strong performance this year now leaves limited upside.In a research report on Tuesday morning, the broker said: "Smith & Nephew has had a solid run since the beginning of the year and, whilst we continue to believe in the company's long-term strategy, focusing on international market growth and lowering exposure to developed market hips and knees, we believe that the current valuation fairly reflects this given the earnings growth on offer."Nevertheless, the target price for the stock has been increased from 797p to 830p after Citigroup raised its estimates for the woundcare division which performed well in the first half.One downside was the hips and knees activities which underperformed competition in the second quarter largely due to the company's position in the product cycle versus its peers.Citi said: "We expect some acceleration over the second half of the year but the overall market remains challenging with nothing to suggest this will change in the near-to-medium term."The stock was down 0.19% at 783.5p by 10:24.BC