醫(yī)療供應(yīng)與設(shè)備行業(yè)盈利預(yù)覽

1、COREMedical Supplies & DevicesEarnings PreviewsEARNINGS PREVIEWEquityResearch15April2019EarningskickofTuesdaywithJ&J:1QearningsforMedTechkickoffofTuesdaywith J&J(co-coveredwithourU.S.Biopharmaceuticalanalyst,GeoffMeacham)reportingits results.J&JsMedicalDevicebusinessprovidesahostofread-thrusforthere

2、stofthe sector,particularlytheorthopediccompanies.Overall,weexpectmostcompaniesto reportstrongresultsandbelieveasinthepastseveralquarters,anysurprisesarelikely tobepositive.WehadanumberofcompaniesattheBarclaysHealthcareConferencein mid-March and our takeaways from those presentations, as well as sub

3、sequent conversations with management teams, were that the overall MedTech market conditionsremainedfavorableandthateachcorporatehadconfidenceinitsforecast. Theoneareawherewedohavesomeconcernsispaclitaxeldrug-coatedballoons (DCBs)aswebelievetheFDALettertoHealthcareProfessionalsislikelytoresultin sof

4、tersalesuntilgreaterclarityonthesafetyprofileisgained.Weexpectsalestobe pressuredatleastuntiltheFDAAdvisoryCommitteemeeting,whichisexpectedtotake placeinJune.BothBectonDickinsonandMedtronicsellpaclitaxelDCBs.Updatingourmodelsaheadof1Q:Inthisreport,wehaveupdatedourmodelsto reflect10K/10Qupdatesandour

5、updatedthoughtsontheendmarkets.Wehave incorporatedintoourmodelssalesreductionsforDCBs,whichresultedinareductionin salesforbothBectonDickinsonaswellasMedtronic.GivenDCBsareabovecorporate averagemargins,wehavereducedourearningsestimateforBectonDickinson.For Medtronic,webelievetherecentdebtrefinancing(

6、whichwehaveupdatedourmodel for)allowsthecompanytooffsettheDCBlossthusourEPSestimatesareunchanged. PleaseseetheSummaryofourRatings,PriceTargetsandEarningsChangesinthis Reportonpage2formoredetails.Updatingourpricetargets:Wehaveraisedanumberofpricetargetstoreflecta highertargetPEtomaintaineachstocksres

7、pectiverelativePEvaluation.Wecontinue tobelievethesectorshouldtradeatapremiumtotheS&P500. Pleaseseethe SummaryofourRatings,PriceTargetsandEarningsChangesinthisReportonpage2 for moredetails.Our stock views: Our ratings are unchanged. We continue to see upside for ABT, CNMD,MDT,andSYK.InthecaseofMDT,w

8、edohavesomeconcernsontheFY20 outlookaswebelieveitislikelytoaslowergrowthyearthoughwethinkexpectations arelikelyalready“there.”WhilewerateboththestocksEqualWeight,HRCandTFX wereveryupbeatatourconferenceandwebelievebothmayhavegoodquarters.We also rate BAX and BDX Equal Weight. We rate AVNS Equal Weigh

9、t, and ZBH Underweight.WebelieveAVNSandEWsquartersmaybemixedasbothhavemore back-end loaded years. ZBH managements comments at recent investor meetings (includingAAOS)seemedmorepositivetoned,thuswewouldnotbesurprisedtoseea “good”quarter(“good”inthecontextofZimmerBiometandrelativetoexpectations).U.S.

10、Medical Supplies & DevicesPOSITIVEUnchangedForafulllistofourratings,pricetargetand earningschangesinthisreport,pleasesee tableonpage2. U.S. Medical Supplies & Devices Kristen Stewart, CFA+1 212 526 6965 HYPERLINK mailto:kristen.stewart kristen.stewart BCI, USPatrick Dearchs, CFA+1 212-526-2404 HYPER

11、LINK mailto:Patrick.Dearchs Patrick.Dearchs BCI, USJosiah Hannon+ 1 212 526 4155 HYPERLINK mailto:josiah.hannon josiah.hannon BCI, USal n rteal n rten I-d e tc itr sReofandtodoAsabethathaveathattheofasaPLEASE SEE ANALYST CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 45.Summary of our

12、Ratings, Price Targets and Earnings Changes in this Report (all changes are shown in bold)CompanyRatingOld NewPrice12-Apr-19OldPrice TargetNew%ChgOldEPS FY1 (E)New %ChgOldEPS FY2 (E)New %ChgU.S. Medical Supplies & DevicesPosPos HYPERLINK /BC/composite/GER_COMPANY?ticker=ABT Abbott Laboratories (ABT)

13、OWOW78.0184.0087.0043.213.21-3.563.56- HYPERLINK /BC/composite/GER_COMPANY?ticker=BAX Baxter International (BAX)EWEW79.3272.0075.0043.263.26-3.693.69- HYPERLINK /BC/composite/GER_COMPANY?ticker=BDX Becton Dickinson and Co (BDX)EWEW246.71260.00266.00212.1011.90-213.3913.15-2 HYPERLINK /BC/composite/G

14、ER_COMPANY?ticker=CNMD CONMED Corp (CNMD)OWOW83.1885.0092.0082.462.46-2.872.860 HYPERLINK /BC/composite/GER_COMPANY?ticker=EW Edwards Lifesciences Corp (EW)UWUW191.71160.00160.00-5.195.2005.665.884 HYPERLINK /BC/composite/GER_COMPANY?ticker=HRC Hill-Rom Holdings Inc (HRC)EWEW106.28103.00108.0055.055

15、.05-5.665.66- HYPERLINK /BC/composite/GER_COMPANY?ticker=MDT Medtronic PLC (MDT)OWOW86.75104.00104.00-5.155.15-5.425.440 HYPERLINK /BC/composite/GER_COMPANY?ticker=SYK Stryker Corp (SYK)OWOW192.67203.00211.0048.128.12-9.008.960 HYPERLINK /BC/composite/GER_COMPANY?ticker=TFX Teleflex (TFX)EWEW305.132

16、87.00309.00811.0311.03-12.6712.680 HYPERLINK /BC/composite/GER_COMPANY?ticker=ZBH Zimmer Biomet Holdings Inc (ZBH)UWUW127.92113.00117.0047.827.82-8.228.22-Source:BarclaysResearch.SharepricesandtargetpricesareshownintheprimarylistingcurrencyandEPSestimatesareshowninthereportingcurrency. FY1(E):Curren

17、tfiscalyearestimatesbyBarclaysResearch.FY2(E):NextfiscalyearestimatesbyBarclaysResearch.StockRating:OW:Overweight;EW:EqualWeight;UW:Underweight;RS:RatingSuspended IndustryView:Pos:Positive;Neu:Neutral;Neg:NegativeCONTENTSTOC o 1-1 h z u HYPERLINK l _bookmark0 SECTORPRICEPERFORMANCE4 HYPERLINK l _boo

18、kmark1 VALUATIONANDPRICETARGETCHANGES5 HYPERLINK l _bookmark2 EARNINGSCALLCALENDAR6 HYPERLINK l _bookmark3 JOHNSON&JOHNSON(JNJ)REPORTSAPRIL167 HYPERLINK l _bookmark4 ABBOTTLABORATORIES(ABT)REPORTSAPRIL178 HYPERLINK l _bookmark5 STRYKER(SYK)REPORTSAPRIL2310 HYPERLINK l _bookmark6 EDWARDSLIFESCIENCES(

19、EW)REPORTSAPRIL2312 HYPERLINK l _bookmark7 CONMED(CNMD)REPORTSAPRIL2414 HYPERLINK l _bookmark8 BAXTERINTERNATIONAL(BAX)REPORTSAPRIL2516 HYPERLINK l _bookmark9 HILL-ROM(HRC)REPORTSAPRIL2618 HYPERLINK l _bookmark10 ZIMMERBIOMET(ZBH)REPORTSAPRIL2620 HYPERLINK l _bookmark11 TELEFLEX(TFX)REPORTSMAY2(TENT

20、ATIVE)22 HYPERLINK l _bookmark12 AVANOS(AVNS)REPORTSMAY7(TENTATIVE)24 HYPERLINK l _bookmark13 BECTONDICKINSON(BDX)REPORTSMAY926 HYPERLINK l _bookmark14 MEDTRONIC(MDT)REPORTSMAY2328SECTOR PRICE PERFORMANCEWhiletheMedTechsectoroutperformedthemarketin1Q19,on a year-to-date basis through April 12, the g

21、roup is underperformingthemarketduetotheperformancethusfarin April. TheS&P500HealthcareEquipment&SupplyIndexisup 12.5% year-to-date versus the S&P 500s up 16.0%. The MedTech group is outperforming the broader S&P 500 HealthcareIndex(up3.8%)onayear-to-datebasis.FIGURE 1Relative (to S&P 500) Price Per

22、formanceSource: RefinitivFIGURE 2Price performance S&P Healthcare Sub-Industries2017Lifesci Tools 43.9%Mgd Care 42.4%HC IT 42.3%2017Lifesci Tools 43.9%Mgd Care 42.4%HC IT 42.3%MedTech 29.9%Healthcare 20.0%S&P 500 19.4%Biotech 16.9%Facilities 15.0%Pharma 9.6%Services 6.1%Distributors 0.8%2018Faciliti

23、es 30.5%Lifesci Tools 14.9%MedTech 13.1%Mgd Care 9.6%Pharma 5.2%Healthcare 4.7%Services 0.4%S&P 500 -6.2%Biotech -7.3%Distributors -21.9%HC IT -22.2%1Q19Lifesci Tools 19.4%MedTech 14.2%S&P 500 13.1%HC IT 9.1%Facilities 7.1%Healthcare 6.1%Pharma 5.4%Distributors 4.6%Biotech 2.0%Mgd Care 0.4%Services

24、-11.8%YTD to 04/12/19LifesciTools23.0%HC IT 19.8%S&P 500 16.0%MedTech 12.5%Facilities 5.3%Healthcare 3.8%Distributors 2.6%Pharma 2.2%Biotech 1.6%Mgd Care -8.4%Services -12.4%Source: RefinitivVALUATION AND PRICE TARGET CHANGESWecontinuetobelievethesectorshouldtrade atapremiumtotheS&P500.Thus,toreflec

25、t theincreaseintheS&P500sPE,wehaveraised a number of price targets to reflect ahigher targetPEtomaintaintheirrespectiverelativePE valuations.PleaserefertothetableSummaryof ourRatings,PriceTargetsandEarningsChanges inthisReportonpage2.ABT: We raise our PT to $87 (from $84) based on 26x (was 27x) our

26、2019E EPSof$3.21 (unchanged).BAX: We raise our PT to $75 (from $72) based on 23x (was 22x) our 2019E EPSof$3.26 (unchanged).BDX: We raise our PT to $266 (from $260) based on 22x (was 21x) our calendar 2019E of $12.07 (was$12.32).CNMD: We raise our PT to $92 (from $85) basedon3.7x(was3.5x)EV/salesmul

27、tiple using our 2019E sales estimate of $941M (unchanged).HRC: We raise our PT to $108 (from $103) based on 21x (was 20 x) our CY 2019E of$5.15 (unchanged).SYK: We raise our PT to $211 (from $203) based on 26x (was 25x) our 2019E EPSof$8.12 (unchanged).TFX: We raise our PT to $309 (from $287) based

28、on 28x (was 26x) our 2019E EPS of$11.03 (unchanged).ZBH: We raise our PT to $117 (from 113) basedon15x(was14.5x)our2019EEPSof$7.82 (unchanged).FIGURE 3Relative (to S&P 500) Price PerformanceMedTechCompositeismarketcapweightedandincludesstocksuchas:ABT,BAX,BDX,ZBH,SYK,HRC,EW,MDT,TFX,as wellascompanie

29、sthatpreviouslytradedbutarenowacquiredincludingSTJ,BCR,GDT,BMET,COVSource: RefinitivEARNINGS CALLCALENDARFIGURE 4Earnings Conference Call CalendarMondayTuesdayWednesdayThursdayFridayApril 15April 16April 17April 18April 19Johnson & Johnson (JNJ)8:30amAbbott Labs (ABT)9:00amDanaher (DHR)8:00amIntuiti

30、ve Surgical (ISRG*)4:30pmUS EQUITY MARKETS CLOSEDApril 22April 23April 24April 25April 26Stryker (SYK)4:30pmCONMED (CNMD)4:30pmBaxter (BAX)8:30amHill-Rom (HRC)8:00amEdwards Lifesciences (EW)5:00pmZimmer Biomet (ZBH)8:30amApril 29April 30May 1May 2May 3Philips (PHG.AS*) 4:00amLivanova (LIVN*)8:00amSm

31、ith & Nephew (SN.L*)details: TDBCardiovascular Sys Inc (CSII*), Dexcom (DXCM*)4:30pmTeleflex (TFX)8:00amInsulet (PODD*)4:30pmMay 6May 7May 8May 9May 10Wright Medical (WMGI*)4:30pm* denotes not covered by Barclays Research, listed as they provide read-thrus for our coverage universe Note: All times i

32、n Eastern Daylight TimeSource: Barclays ResearchJOHNSON & JOHNSON (JNJ) REPORTS APRIL 16FIGURE 5SalesMix,MedicalDevicesBusiness,2018FIGURE 6Stock Rating, Price Target, Valuation, and Performance StatisticsContact Lenses &SurgicalVisionInterven-tionalJohnson&JohnsonMktCapMktCapPrice Performance Stats

33、OtherSolutionsHips JNJS&P13%Specialty Surgery 5%General Surgery 18%Source: Company reportsAdvanced Surgery 15%5%Knees6%Trauma10%Spine & OtherStockrating:EQUALWEIGHT Refinitiv $8.58$9.13YTD 20195.4%16.0%Price(04/12/19):$135.98 $8.18 $8.56$9.082018-7.6%-6.2%PriceTarget:Implied Return-1%ValuationMetric

34、sJNJPricePE onBarclaysCY15.9x15.0 x PE onBarclaysCY15.9x15.0 xIndustryview:PositiveSource: Company reports, Refinitiv, Barclays ResearchBarclays CommentaryWhat to focus on for the upcoming quarter Specific to the Medical Devices businessBarclays CommentaryWhat to focus on for the upcoming quarter Sp

35、ecific to the Medical Devices businessCommentaryonhealthcare“macro”trends:J&JtypicallyprovidesarecapoftheU.S.utilizationtrends forthepriorquarteraswellasitspreliminaryestimatesforthecurrentquarter.J&Jhadestimatedthatin 3Q18,hospitaladmissionsandsurgicalprocedureswerebothupabout1.5%andlabprocedureswe

36、re upabout1%. J&Jspreliminaryestimatesfor4Qindicatedhospitaladmissionsandsurgicalprocedure growthwasabitweakeratup1%andlabprocedureswereconsistentwith3Q,upabout1%.1Qsalesgrowthrelativetohistoricaltrends:In4Q18,J&JsMedicalDevicesegmentgrew3.3%WW and1.0%intheUSonanorganicbasis(excludingFX,acquisition,

37、anddivestitures).Forthefullyear 2018,J&JsMedicalDevicesegmentgrew2.6%WWand1.0%intheUSonanorganicbasis.Orthopedic product performance relative to trends: In the past, there has been increasing seasonalitywithintheorthopedicmarketsintheUnitedStateswithastrongerperformancetypically in4Qascomparedto1Qas

38、deductiblesreset.In4Q18onanoperationalbasis,J&Jshipswereup 2.0%WW(+2.3%US),kneeswereup0.2%(-2.8%US),Traumaup2.2%(+1.5%US),andSpine down1%WW(flatUS).For2018onanoperationalbasis,hipswereup1.2%(+1.7%US),knees down1.9%(-3.9%US),traumaup2.5%(+1.5%US),andspinedown5%(-5%US).Commentaryonstrategy/M&Aappetite

39、:WewouldlistenforanycommentaryonM&Aappetitewithin devices.Price PerformanceSource: RefinitivABBOTT LABORATORIES (ABT) REPORTS APRIL 17FIGURE 8Sales Mix, 2018Neuromod DiabetesPediatricFIGURE 9Stock Rating, Price Target, Valuation, and Performance StatisticsMktCapMktCapStructural 3%NutritionEPS Price

40、Performance StatsHeart 4%Vascular10% HF EPMgmt Established Pharma &Dx Adult Nurition 10%Core Diagnostics 14%Dx ABTS&PStockrating:OVERWEIGHT $2.88 $3.21$3.60 YTD20197.9%Price(04/12/19):$78.01 $3.21$3.56 201826.7%PricePriceTarget:$87.00Implied Return12%ValuationMetricsABT PricePE onBarclaysCY24.3x21.9

41、x PE onBarclaysCY24.3x21.9xIndustryview:PositiveSource: Company reports, Refinitiv, Barclays ResearchOur view on the stockWeviewAbbottasahigh-qualitygrowthasset.WebelievethecompanyhasafavorablemixofbusinessSource: Company reportsfrombothaproductandgeographicperspective.WeseetheMedicalDevicebusinessa

42、sakeydriverof growthgoingforward.Webelievethegrowthprofilewarrantsapremiumvaluation.FIGURE 10PricePerformanceSource: RefinitivUpcoming Events/CatalystsApril17: QuarterlyresultsMay1:Read-thrusonCGMmarketfromDexcomsresultsMay8-11:HeartRhythmSociety(HRS)MeetingMay21-23:EuroPCRmeeting(InterventionalCard

43、iology)Jun7-11:AmericanDiabetesAssociation(ADA)ConferenceJun 12-15: Transcatheter Valve Therapies (TVT)ConferenceAug4-8:AmericanAssociationofClinicalChemistry(AACC)“soon”:FDAapprovalofFreeStyleLibre2FIGURE 11EPSSurpriseHistory(ActualVersusEstimate,$0.00difference)$0.06$0.05$0.04$0.03$0.02$0.01FIGURE

44、 12Sales Surprise History (Actual Versus Estimate, % difference)Barclays CommentaryWhat to focus on for the upcoming quarter1Qsalesgrowth:Barclays CommentaryWhat to focus on for the upcoming quarter1Qsalesgrowth: Abbottguidedto“organic”salesgrowthof“alittlelessthan7%”inthequarter. Bydivision,Abbotte

45、xpectedEPDsalesgrowthinthemid-single-digits,Nutritiongrowthinthelow- tomid-singledigits,legacyDiagnosticsgrowthinthemid-tohigh-singledigits,RapidDiagnostics toberelativelyflatreflectingtoughflucomps,andMedicalDevicestobeinthehigh-singledigits.FreeStyleLibresalesandLibre2.0updates:Libresalesweremoret

46、han$1billionin2018andat theendof2018,Abbotthad1.3millionusersworldwide(2/3rdType1and1/3Type2).In4Q18, Abbottadded300thousandnewusers.Listenforcommentaryonthesalescontributioninthe quarter.AbbottisseekingFDAapprovalforitsFreeStyleLibre2,whichincludesoptionalalarms.On its4Q18callinJanuary,managementco

47、mmentedthat2.0shouldcometotheU.S.“shortly.”Weare expectinganapprovalsometimearoundmid-year;beforetheAmericanDiabetesAssociation meetinginJunewouldbeideal.Guidanceupdates:Abbottexpectsfullyear2019organicsalesgrowthinthe6.5%-7.5%rangeand EPSof$3.15-$3.25.WeexpectAbbotttoreiteratethisguidance.FIGURE 13

48、Barclays Versus Consensus Estimates and GuidanceActual2019EBarclaysStreet2020EBarclaysStreetRevenues ($ in millions)1Q$7,390$7,433$7,472$7,919$7,9842Q$7,767$7,907$7,950$8,436$8,4293Q$7,656$8,016$8,085$8,571$8,6014Q$7,765$8,330$8,326$8,921$8,786Year$30,578$31,686$31,862$33,847$34,069EPS1FQ$0.59$0.61$

49、0.61$0.69$0.722FQ$0.73$0.81$0.80$0.89$0.903FQ$0.75$0.86$0.85$0.95$0.944FQ$0.81$0.92$0.94$1.02$1.04Year$2.88$3.21$3.21$3.56$3.60Company Sales Growth GuidanceCompany EPS Guidance1Q19: Organic a little less than 7% 1Q19: $0.60-$0.62 2019: Organic6.5%-7.5% 2019:$3.15-$3.25Source: Company reports, Refini

50、tiv, Barclay ResearchSTRYKER (SYK) REPORTS APRIL 23FIGURE 14Sales Mix, 2018NeurotechSpine 6%Knees 12%FIGURE 15StockRating,PriceTarget,Valuation,andPerformanceStatisticsMktCapMktCapEPS estimatesPrice Performance StatsPrice Target:$211.00Trauma & ExtremitiesImplied Return10% ValuationMetrics Price Tar

51、get:$211.00Trauma & ExtremitiesImplied Return10% ValuationMetrics SYK 52-Week Price Range$199.63 - $144.77Industryview:PositivePE onBarclaysCY23.7x21.5xSustain- ability Endoscopy 14%Source: Company reportsHips 10%Other Ortho3%Instruments13%Stockrating:OVERWEIGHT $7.31 $8.13$8.93 YTD201922.9%Price(04

52、/12/19):$192.67 $8.12$8.96 20181.2%Source: Company reports, Refinitiv, Barclays ResearchOur view on the stockWebelieveStrykercansustainitsabove-sectorrevenuegrowthprofileasweseemultipledriversacrossall threeofitsbusinesses(Orthopedic,MedSurg,Neurotech&Spine).WebelieveStrykercandeliveronits margincom

53、mitmentgoals(ofatleast30-50bpannually)todriveatleast9%EPSgrowth.GiventheFIGURE 16PricePerformanceSource: Refinitivoutlook, we believe a premium PE is justified.Upcoming Events/CatalystsApril16:Read-thrusfromJ&JsresultsApril23:QuarterlyresultsApril26:Read-thrusfromZimmerBiometsresultsMay1:AnnualShare

54、holdersMeetingMay2:Read-thrusfromSmith&NephewsresultsFIGURE 17EPSSurpriseHistory(ActualVersusEstimate,$0.00difference)$0.10$0.08$0.06$0.04$0.02$0.00 FIGURE 18Sales Surprise History (Actual Versus Estimate, % difference)Barclays CommentaryWhat to focus on for the upcoming quarter1Qsalesgrowth:Barclay

55、s CommentaryWhat to focus on for the upcoming quarter1Qsalesgrowth:OrganicsalesgrowthisametricthatisheavilyfocusedonforStryker(aswellas operatingmarginexpansion).In2018,Strykerstotalorganicsalesgrowthwas7.9%.In4Q18, Strykerssaleswereup8.6%organically.Typically,thereissomedecelerationbetween4Qand1Q d

56、uetoseasonality.WealsoexpectgrowthtobeabitsofterinMedSurgowingtoproductlaunch timingofthe1688AIM4Ksystem(whichstartstoimpact2Q19).Wereforecastingorganicsales growthof6.7%.ForthefullyearStrykerexpects6.5%-7.5%organicsalesgrowth.Knee performance: Knees represent 12% of Strykers total sales but, in our

57、 view, are disproportionatelymoreimportanttothestockstrading. Strykerhasbeengainingshareinknees asithasbenefitedfromtheMakorobotic-assistsystemaswellashigherpenetrationofcementless knees.In2018,Strykerskneesaleswereup6.7%WWex-FX(up6.9%inUS).In4Q18,Strykers kneesaleswereup5.5%WWex-FX(up5.8%inUS).Thou

58、ghtherehasbeensomeincreased seasonality(adecelerationfrom4Qto1Q),weareexpectingfairlysimilarratesofgrowthin1Q19 withWWsalesup5.5%ex-FXandUSsalesup5.5%.StrykershouldprovideanupdateonMako metricsduringitsconferencecall.Update on M&A transactions: We expect an update on K2M (our view is the integration

59、 is proceedingwellandStrykerwillreaffirmitsgoalof5%proformaspinesalesgrowthfortheyear). Wealsoexpectanupdateonthetwootherdealsannouncedinthequarter(OrthoSpaceand Arrinex).Guidance:WeexpectStrykertoreaffirmitsguidanceforthefullyear.FIGURE 19Barclays Versus Consensus Estimates and GuidanceActual2019EB

60、arclaysStreet2020EBarclaysStreetRevenues ($ in millions)1Q$3,241$3,508$3,516$3,742$3,7532Q$3,322$3,627$3,613$3,857$3,8513Q$3,242$3,568$3,571$3,793$3,7974Q$3,796$4,100$4,117$4,359$4,374Year$13,601$14,802$14,809$15,751$15,798EPS1FQ$1.68$1.83$1.84$2.04$2.022FQ$1.76$1.96$1.96$2.17$2.143FQ$1.69$1.89$1.90