Smith & Nephew Stock Slides After Cutting Full-Year Revenue Forecast

Shares of Smith & Nephew (LSE:SN) fell sharply on Tuesday after the medical technology company cut its full-year revenue forecast, citing a significant second-quarter sales miss and ongoing challenges in its U.S. orthopaedics division.

The stock dropped nearly 5.9% to 1,126.5 pence following the announcement, pushing it toward the lower end of its 52-week range.

Guidance Cut and Q2 Miss

Smith & Nephew lowered its underlying revenue growth forecast for the full year 2026 to a range of 4% to 6%, down from its previous target of approximately 6%. The revision came after the company reported disappointing second-quarter results that fell short of market expectations.

Key figures from the company's first-half report include:

• Q2 underlying revenue growth: 1.6%, missing analyst consensus estimates of roughly 3.7%.
• First-half revenue: $3.10 billion, up from $2.96 billion in the prior year.
• First-half underlying growth: 2.3%.

U.S. Orthopaedics Under Pressure

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The company attributed the weak performance primarily to its orthopaedics division. In a statement, CEO Deepak Nath acknowledged "ongoing challenges in US Knee Implants ahead of new product introductions" and also pointed to "temporary headwinds in US Hip Implants."

These struggles in the company's largest segment overshadowed strong performance in its Sports Medicine division. The persistent softness in the U.S. implant market was the decisive factor behind the guidance reduction.

Market Reaction

Investors focused on the revenue downgrade despite the company's efforts to provide positive offsets. Smith & Nephew reaffirmed its trading profit growth guidance for the year and flagged an additional $50 million in efficiency savings.

The negative sentiment was compounded by a recent analyst downgrade from Kepler Cheuvreux, which had previously cut its rating to 'Hold' and reduced its price target, citing limited catalysts for the stock in the near term. The company-specific news drove the decline, with the broader FTSE 100 index trading flat on the day.