JPM sees challenges to continue for European medtech & services in H1
03/12/2024 12:43
** J.P.Morgan expects "not particularly exciting" first half of 2025 for European
medtech & services citing continued challenges from 2024, among them anticorruption
legislation and consumer slowdown in China, slower end-markets and tariff threat
** The brokerage sees potential scope for better share price performance in H2 if
companies give cautious guidance, and H2 acceleration later allows for upside
** JPM prefers value names with significant re-rating potential, rating such stocks
"overweight"
** Its top "underweight" stock is Fresenius Medical Care FMEG.DE as it sees
likely challenging 2026-2027 forecasts in the absence of a return to decent volume
growth, or a step change in reimbursement, and additionally risk from potential mix
pressure
** The broker points out that Elekta EKTAb.ST and Carl Zeiss AFXG.DE are
over-exposed to China, keeping its "underweight" rating on both names
** It cuts Sonova SOON.S from "neutral" to "underweight" post the strong
re-rating of the shares on the new product launch, with risk-reward now looking
unattractive
COMPANY NEW RATING OLD RATING NEW PT OLD PT
Fresenius FREG.DE overweight - EUR 42 -
Gerresheimer GXIG.DE overweight - EUR 121.8 -
Alcon ALCC.S overweight - CHF 79.6 -
ConvaTec CTEC.L overweight - GBp 300 -
Smith & Nephew SN.L overweight - GBp 1,180 -
Demant DEMANT.CO overweight - DKK 319 -
Siemens Healthineers SHLG.DE overweight - EUR 65.9 -
GN Store Nord GN.CO overweight - DKK 252 -
Spire Healthcare Group SPI.L overweight - GBp 321 -
Amplifon AMPF.MI neutral - EUR 33.4 -
Ambu AMBUb.CO neutral - DKK 76 -
Straumann STMN.S neutral - CHF 143 -
Philips PHG.AS neutral - EUR 24.7 -
Coloplast COLOb.CO underweight - DKK 698 -
Sonova SOON.S underweight neutral CHF 224 -
Carl Zeiss Meditec AFXG.DE underweight - EUR 45 -
Getinge GETIb.ST underweight - SEK 160 SEK 180
Elekta EKTAb.ST underweight - SEK 63 -
Fresenius Medical Care FMEG.DE underweight - EUR 37.3 -
(Reporting by Marta Frąckowiak)
((marta.frackowiak@thomsonreuters.com))