EPS to determine 2024 winners and losers in European medtech -MS

Biomerieux SA

08/01/2024 09:49

** Morgan Stanley expects earnings per share (EPS) to
indicate 2024 winners and losers in European medical technology,
saying EPS revisions should produce above-average price moves
after some recovery in 2023
    ** It notes 2023 already saw some earnings re-basing due to
a combination of inflation, energy prices and consumer weakness,
and the sector valuation now looks "OK"
    ** The broker upgrades Italy's Amplifon  AMPF.MI  to
"overweight" from "equal weight", saying the hearing aid maker
has showed more EPS resilience than the sector 
    ** Amplifon has also delivered progress in gross and EBIT
margins, squeezing manufacturers thanks to its scale, MS adds
    ** MS raises Swiss-based hearing aid maker Sonova  SOON.S 
to "overweight" from "equal weight", expecting possible new
product launches and more tactical management to accelerate
growth
    ** It downgrades to "underweight" from "equal weight" Danish
hearing aid firm Demant  DEMANT.CO  on a risk of market share
loss, and German dialysis specialist FMC  FMEG.DE  on GLP-1 drug
exposure and wage inflation biting margins
    ** The broker's 2024 top picks are British medical products
manufacturer Smith & Nephew  SN.L  and French diagnostics
company bioMerieux  BIOX.PA  (both "overweight")

 (Reporting by Alberto Chiumento)
 ((Alberto.Chiumento@thomsonreuters.com;))