European Crisis To Affect Medical Technology Stocks

Analysts at Piper Jaffray have pointed out that Medical Technology companies with significant exposure to Europe face higher risks. The first risk comes from the recent volatility in foreign exchange markets as the Euro has depreciated significantly.

Also, tightened government spending will induce risks as hospital access could be restricted and procedures postponed. Furthermore, payments to companies from national health schemes/systems may be squeezed.

In addition, critical procedures may be postponed as hospitals tighten their budgets. Piper Jaffray also cites the risk of downward pricing pressures in Europe. Medical devices are about 4-6% of total healthcares costs in Europe.