BROKERWATCH Smith & Nephew upped to 'buy' from 'neutral' at UBS

LONDON, Jun 18, 2008 (Thomson Financial via COMTEX) -- SNN | Quote | Chart | News | PowerRating -- UBS has upgraded Smith & Nephew Plc. to 'buy' from 'neutral', according to traders.

In a note, the broker said it thinks that stock has been oversold, the selling spate prompted when the medical devices developer and manufacturer revealed $100 million of sales acquired with PLUS orthopaedics in the second-quarter of 2007 were lost owing to the discontinuation of unacceptable selling practices.

However, the broker noted that hip resurfacing continues to grow strongly globally, while its negative pressure wound therapy products has started well in the United States, notes UBS, and it thinks it is a long-term story.

Leaving its price target on the stock at 680 pence, the broker said its estimates are 10 percent below consensus for the second-quarter of 2008.

For 2009, it is above consensus but thinks full-year 2008 earnings per share will be very back-end loaded -- with 33 percent materialising in the fourth-quarter of 2008.

It thinks management needs to deliver consistently good numbers to restore confidence. hannah.benjamin@thomsonreuters.com hmb/sal

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