Smith+Nephew trimmed its full-year 2026 revenue growth forecast on Tuesday, cutting guidance from about 6 percent as continued weakness in its US orthopaedics unit, its largest market, weighed on the business. The company still expects a stronger second half, driven by the rollout of its new cementless LANDMARK Knee System.
Smith+Nephew cut its full-year 2026 revenue growth forecast on Tuesday, trimming guidance from about 6 percent on US orthopaedics weakness.
The company's first-quarter trading update, published in May, cited persistent softness in US knee implants as the drag, even as Sports Medicine and Advanced Wound Management delivered growth, according to the statement.
The revision follows a first quarter that missed expectations as knee implant sales faltered. Smith+Nephew reported full-year 2025 revenue of US$6.16 billion, up 6.1 percent, with net income of US$625 million, up 52 percent, and earnings per share of US$0.72, while its trading margin expanded to about 19.5 percent from 18.1 percent a year earlier.
The guidance cut pressures a stock trading at UK£11.59, down from a 52-week high of UK£14.42 and a 90-day slide of 7.4 percent, with a market value of about UK£9.7 billion. The company reports second-quarter results on Aug. 4.
Smith+Nephew still anticipates a stronger second half, fueled by the rollout of its new cementless LANDMARK Knee System and continued innovation across business units, the company said. Analysts value the stock at about UK£13.69 per share, roughly 15 percent above the current price, according to consensus estimates compiled by Simply Wall St, with earnings forecast to grow about 13 percent a year.
The US is Smith+Nephew's largest market, and the orthopaedics unit is its biggest segment, making the softness there a direct hit to group growth. Peers in the UK medical equipment space, including Convatec Group and NIOX Group, face similar pressure from hospital budget constraints and pricing scrutiny.
The company has leaned on capital returns to support the stock, completing a US$500 million share buyback tranche in March that repurchased 28.3 million shares, about 3.24 percent of the company, and maintaining a dividend yield of 2.5 percent with a payout ratio of 54 percent.
The cut signals management expects US orthopaedic demand to stay soft into the second half, testing the company's LANDMARK rollout. Investors will watch the second-quarter earnings call on Aug. 4 for updated segment margins and any further revision to guidance.
This article is for informational purposes only and does not constitute investment advice.
