Smith & Nephew Share Price Forecast 2021 – Time to Buy SN?

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Shares of manufacturing company Smith & Nephew (LSE: SN) are in the red today as the price has dropped rapidly over the last few days. It makes investors wonder if it is the right time to pick SN shares.

Smith & Nephew – Technical Analysis

According to the financial statement released by Smith & Nephew, the company has a market cap of £13.603B while the total assets are worth £8.056B. The revenue of the company was £3.56B for 2020 compared to £4.03B in 2019. The market was closed on July 29 at £1464.5 with a downtrend of -6.33%.

You can get more insight from the technical information of SN. Moving Averages such as Exponential Moving Average (10)(1513.2), Simple Moving Average (10)(1514.3), Volume Weighted Moving Average (20)(1524.3), and Simple Moving Average (20)(1536.9) are pointing towards a sell action. On the other side, Oscillators like Stochastic RSI Fast (3, 3, 14, 14)(56.6), Williams Percent Range (14)(-72.5), and Bull Bear Power (-119.7) are being neutral, while MACD Level (12, 26)(-13.2) is pointing towards selling.

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Recent Developments

Founded in 1856 By James Smith in the United Kingdom and headquartered in London, Smith & Nephew develops, manufactures, promotes, and sells medical devices. The company functions through three segments: the orthopaedics segment, Sports Medicine and ENT segment, and Advanced Wound Management segment. The Advanced Wound Management segment manages advanced wound care, advanced wound devices, advanced wound care, and advanced wound bioactive business. The Orthopaedics segment, as well as Sports Medicine and ENT segment, take care of knee implants and other reconstruction, sports medicine joint repair, and arthroscopic enabling technologies.

At the beginning of the year, Smith & Nephew stated on January 5, 2021, that it completed the acquisition of the Extremity Orthopaedics of Integra LifeSciences for $240M. This purchase is going to strengthen Smith & Nephew’s extremities business by adding a combination of a complementary shoulder replacement, a new product pipeline, a focused sales channel, and upper and lower extremities portfolio. The company expects to launch a next-generation shoulder replacement system by 2022.

As obtained from the financial statement, Smith & Nephew’s annual revenue had already dropped in 2020 than in 2019. This year also, the company was expecting a revenue drop. On January 11, 2021, Smith and Nephew expressed that a 7% decline in underlying revenue was expected in the fourth quarter of 2020. For full-year revenue, a drop of 12% was predicted as well.

The company posted on July 29, 2021, that it has noticed a surge in revenue and attributable profit for the first half of 2021 after the Covid-19 restrictions are lifted and all of its franchises are booking powerful growth. For the first half, attributable profit has gone up to $205M or $0.23 per share, from $100M or $0.11 per share in the last year. Revenue has also gone up to $2.60B compared to $2.02B during the prior-year half. The board of Smith & Nephew announced a flat year-over-year dividend of $0.144 per share in the meantime.

Should You Buy SN Shares?

As an investor, you must keep your eyes on the share price chart and observe the price movement to assess risks and rewards before purchasing a share. SN shares are following a downtrend at the moment as the price is dropping continuously. Moreover, technical indicators are also not giving a green signal. All Moving Averages are pointing towards selling, while some oscillators are also pointing towards a sell action, or being neutral. So, it is clear that this is not the right time to invest in SN shares. It would be better to observe the price movement for a few more days.

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