Smith & Nephew plc develops, manufactures, markets, and sells medical devices in the advanced surgical devices and advanced wound management sectors worldwide. The Company operates in two segments: Advanced Surgical Devices and Advanced Wound Management. The company was founded in 1856 and is based in London, the United Kingdom.
SNN Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Smith & Nephew Plc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Smith & Nephew Plc ranked in the 24th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Smith & Nephew Plc ended up being:
As a business, SNN is generating more cash flow than 78.67% of positive cash flow stocks in the Healthcare.
The business' balance sheet suggests that 6% of the company's capital is sourced from debt; this is greater than merely 16.4% of the free cash flow producing stocks we're observing.
SNN's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 42.65% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Healthcare that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as SNN, try ABC, LGND, RMD, VIVO, and A.
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