Broker snap: Positive 2011 outlook for S&N

10th Feb 2011 13:14

Financial services firm Matrix has maintained its positive stance on Smith & Nephew (S&N), despite the departure of boss David Illingworth, as the broker expects to see strong growth in both S&N's Endoscopy and Advanced Would Management (AWM) divisions."The retirement of the current chief executive officer (CEO) is not a significant issue in our opinion; the new CEO joins from Pierre Fabre. Recent M&A speculation will persist in our view and further consolidation pressures are building within the sector."Orthopaedics revenues were down by 1% in the fourth quarter as European markets were plagued by austerity measures. While the division saw a 2% increase over the full year, Matrix expects to see mixed growth in 2011 as revenues continue to remain under pressure.However, both Endoscopy and AWM grew by 7% in 2010 and are estimated to grow ahead of the market this year. Matrix remains a 'buyer' with a target price of 893p.