Smith & Nephew Eyes Accelerated Earnings Growth Under New 'Ambitious but Achievable' Strategy

06:59 AM EST, 12/08/2025 (MT Newswires) -- Smith & Nephew (SN.L) is setting its sights on a "significant" acceleration in revenue and profit growth as part of its new strategy, building on its previous turnaround plan to bolster operational performance and enhance shareholder value by focusing on four key elements. The British medical technology company said Monday it aims to reach more patients under its Rise strategy by expanding its indications, settings and global market share. It also intends to zero in on innovation by speeding up new product launches, along with increasing scale through investment and executing its plan efficiently by driving enterprise productivity. "Smith+Nephew's new RISE strategy represents an ambitious but achievable new chapter. Our actions under the 12-Point Plan have created a fundamentally stronger business than three years ago and a springboard for future growth," Chief Executive Officer Deepak Nath said. "Over the next three years, every business unit will contribute uniquely to our value creation. Sports Medicine, Advanced Wound Management and ENT will drive above-market growth through innovation and disciplined execution, while Orthopaedics, operating in a more mature segment, will return to delivering market-level growth, supporting margin expansion, and enhanced returns." In line with its new strategy, Smith & Nephew unveiled its financial goals for 2028, aiming to deliver a compound annual growth rate of 6% to 7% and 9% to 10%, respectively, in underlying revenue and trading profit. In terms of free cash flow, the group is targeting a free cash flow of over $1 billion by the end of the said year. Analysts at RBC Capital Markets noted a positive sentiment on Smith & Nephew following the company's strategy reveal a few hours ahead of today's investor day. "We note that the new mid-term revenue CAGR target is highly ambitious and implies significant (c.1.5ppt pa) upside to consensus expectations over the period at the mid-point," the research firm said. "We think that this is likely to drive the shares up this morning, but given the substantial improvement in performance implied by these targets, we remain nervous until the company can demonstrate reliability that it can generate this growth." For the near term, the group now expects its trading profit margin to reach at least 19.5% in full-year 2025, up from the previous 18.1%, while free cash flow guidance was raised to $800 million from $600 million. Underlying revenue growth, on the other hand, is still projected to stand at 5%. The company also provided a provisional guidance for 2026, targeting a 6% rise in underlying revenue and $800 million in free cash flow. Profit is anticipated to increase ahead of revenue as the company continues its efforts in streamlining its product range and rationalizing its business portfolio. Smith & Nephew's shares were over 1% higher in London as of Monday midday trade.