8 Most Undervalued Healthcare Stocks to Buy According to Analysts

6. Smith & Nephew Plc (NYSE:SNN)

Price Target Upside: 27%

Smith & Nephew plc (NYSE:SNN) is a global medical technology company specializing in orthopedic reconstruction, sports medicine, and advanced wound care solutions. The company stands out for its commitment to innovation, investing in research and development to create cutting-edge technologies like robotic-assisted surgical systems, advanced biomaterials, and digital health platforms. Recent innovations, such as the CORI Digital Tensioner for knee procedures and advanced hip systems, enhance surgical precision and improve patient outcomes.

Smith & Nephew plc (NYSE:SNN) reported strong Q4 2024 and full-year results, which were fueled by its 12-Point Plan for operational transformation. Its Q4 revenue reached $1.57 billion, reflecting a 7.8% increase, while full-year revenue totaled $5.8 billion, with a 5.3% growth rate. New product launches contributed over 60% to this growth.

The company’s profitability saw significant gains, with operating profit surging 54.6% to $657 million. Trading profit rose by 8.2%, reaching over $1 billion, and trading profit margin increased to 18.1%, up from 17.5% in 2023. Cash flow also improved, with operational cash growing 50.2% to $1.24 billion and free cash flow increasing by 327.1% to $551 million.

Smith & Nephew plc (NYSE:SNN)’s earnings per share (EPS) jumped 56.3% to 47.2 cents, while adjusted EPS rose slightly to 84.3 cents. The company’s strong performance was driven by operational efficiency, better product availability, and successful commercialization, despite challenges like inflation and issues in China.

Looking ahead, the business expects revenue growth of around 5% in 2025, with trading profit margins projected between 19–20%. Continued operational savings are expected to further boost margins beyond 2025.