Morgan Stanley maintained an in-line view on European medical technology stocks while adjusting ratings and price targets following strategic updates and earnings outlooks.
The hearing-aid subsector remained a preferred area, with the market expected to return to about 5% growth over the next 12 to 18 months, ahead of company guidance. Amplifon and ConvaTec were highlighted as top positive stories within the segment.
Coloplast’s rating was raised to equal weight from underweight, with a price target lifted to 454 Danish crowns from 370 Danish crowns. Analysts described the move as clearing-event neutral, noting the incoming chief executive is likely to emphasize growth over margin in a strategy update scheduled for November 3. Demant’s target was increased to 388 Danish crowns from 296 Danish crowns, with the stock preferred over Sonova due to stronger near-term earnings upside from its Zeal platform and ahead-of-plan cost savings.
ConvaTec’s target rose to 289 pence from 263 pence, supported by one-year visibility in its Infusion Care unit and expected double-digit growth in that segment. The company’s cash conversion was cited as enabling share buybacks worth roughly 10% of its market capitalization over the next three years. Sonova’s target was raised to 245 Swiss francs from 205 Swiss francs.
Smith & Nephew’s rating was cut to equal weight from overweight, with a price target reduced to 1,158 pence from 1,304 pence. Analysts framed the move as clearing-event neutral, stating the company requires a medium-term rebase at its fiscal 2026 results, due in February 2027.
Carl Zeiss Meditec was initiated as a top pick at underweight with a 25.88 euro target. Analysts noted profitability gains from its ProfitUp program are back-end loaded and unlikely to support fiscal 2026/27 results, while soft global demand and challenges in China’s refractive and cataract businesses were flagged as headwinds. Its EBITA estimate sits about 10% below consensus ahead of December results.
