Recession fears, high inflation threaten profit outlook for Medtech- BTIG

Establishment Labs Holdings

18/07/2022 11:57

** Brokerage BTIG says it fears medical device makers may
lower their profit forecast during the second-quarter earnings
season amid growing recession risks and rising inflation
    ** Markets have become increasingly jittery about a global
economic downturn, as central banks look to aggressively raise
borrowing costs to rein in soaring prices, with a
hotter-than-expected U.S. inflation number in June adding to the
fears
    ** BTIG believes Medtech revenue should stay stable given
improving demand for deferred medical care which had taken a hit
earlier this year, though it notes procedures stay under
pressure from hospital staffing challenges
    ** Says a key concern for the sector is how long supply
chain and inflationary pressures would last, given many
companies had previously thought they would begin to ebb in Q2
    ** BTIG is cautious on Globus Medical  GMED.N , Vericel Corp
 VCEL.O  and Integra LifeSciences  IART.O ; believes Intuitive
Surgical  ISRG.O , Glaukos Corp  GKOS.N  Establishment Labs
 ESTA.O  positioned for a beat-and-raise quarter
    ** The S&P 500 healthcare equipment and services index
 .SPLRCHC , which houses several medtech stocks, had fallen
11.8% so far this year vs a nearly 8% decline in the overall
healthcare sector  .SPXHC 

 (Reporting by Amruta Khandekar)
 ((Amruta.Khandekar@thomsonreuters.com;))