Smith & Nephew Seeks to Expand Presence in ASCs; Modestly Lowering Our Fair Value Estimate

We’ve modestly lowered our fair value estimate on Smith & Nephew to $40 per ADR (GBX 1513 local share class), from $43 (GBX 1534), after adjusting our assumptions slightly downward for lower profitability from the orthopedic segment as Smith & Nephew assertively pursues expansion in ambulatory surgical centers, as well as higher input and transportation costs in the near term. In our base case, we continue to assume hips, knees, and sports medicine will return to more normal growth in 2022 as more elective orthopedic, sports medicine, and ENT (Ear, Nose, and Throat) procedures are rescheduled.