Updated Medical Device Analysis At Baird Finds New Winners And Losers

Improving macro factors, favorable y/y weather comps, and stabilizing seasonality have resulted in stable US ortho and spine volumes in 1Q. Baird’s OUS checks reveal stable trends in Europe, and show that Emerging Markets continue to face mixed trends.

Analyst Jeff D. Johnson expects these positive trends, along with the easing of forex headwinds, to allow medical device companies to perform ahead of expectations in 2016.

Exactech

Johnson upgraded the rating for Exactech, Inc. EXAC from Neutral to Outperform, while raising the price target from $21 to $26.

Earlier-than-anticipated product approvals, recent product launches, and customer wins are expected to boost the company’s performance over coming quarters, the analyst said.

Stryker

Johnson downgraded the rating for Stryker Corporation SYK from Outperform to Neutral, while raising the price target from $111 to $116, citing the stock’s high valuation.

While Stryker’s current high stock valuation and current premium to ortho peers appear warranted, the risk reward looks increasingly balanced, Johnson commented.