UK shares, as an entire, have had a good run in 2024. 12 months so far, the FTSE All-Share index is up about 5%.

But there are nonetheless many shares miles off their highs and have the potential to soar within the years forward. Right here’s a have a look at one which’s at the moment buying and selling round 50% under its all-time highs.

Down a whopping 50%

Smith & Nephew’s (LSE: SN.) a medical expertise enterprise that’s centered on hip and knee implants, robotic surgical procedure options, and trauma merchandise. A FTSE 100 firm, it at the moment has a market-cap of round £9bn.

As a long-term investor who likes to again large developments, I’ve at all times thought S&N has baggage of potential from an funding perspective. This is because of the truth that the world’s inhabitants is ageing quickly. As we age, our joints have a tendency to interrupt down. My grandfather was an excellent instance right here – after turning 70, he wanted each knees and a hip changed (an excessive amount of golf).

The inventory hasn’t carried out nicely lately although. That’s as a result of it confronted challenges as a result of coronavirus. This considerably restricted the variety of joint alternative surgical procedures that would happen globally. On account of this disruption, the corporate’s share price has fallen from near-£20 to round £10.

Poised for a rebound

The outlook’s now bettering although. The world over, elective surgical procedures are going down once more and there’s fairly a big backlog for joint alternative procedures.

For instance, a report revealed this month within the Medical Journal of Australia mentioned that its nationwide annual caseload would want to extend by 16% by the top of 2024, 10% by the top of 2025, or 8% by the top of 2026 to clear the backlog collected through the pandemic.

This leads me to consider there’s potential for a share price rebound right here. At present, the forward-looking P/E ratio right here is simply 12 utilizing subsequent yr’s earnings per share forecast. That’s low for a high-quality healthcare firm. Particularly with analysts anticipating earnings progress of 11% this yr and 17% subsequent. Given this low valuation, I consider those that are prepared to be affected person with this inventory could possibly be rewarded.

It’s price noting that analysts at JPMorgan just lately raised their goal price for Smith & Nephew to 1,381p from 1,300p. That’s about 37% larger than the present share price. If the inventory was to hit that degree, traders could possibly be a complete return of about 40% over the subsequent 12 months as soon as the three% dividend yield is factored in.

I’m bullish

Now a key threat to the funding case is GLP-1 weight reduction medication like Wegovy. The uncertainty created by these medication (in relation to demand for joint replacements) is one cause the share price remains to be down within the dumps.

Nevertheless, it’s nonetheless too early to know in the event that they’ll have any long-term impression on the trade. Some analysts consider they may truly assist corporations like Smith & Nephew as they’ll allow extra individuals to qualify for surgical procedure.

Personally, I consider that the outlook for this firm stays engaging as a result of ageing inhabitants. And on the present share price, I feel its shares are a steal.

I truly wouldn’t be stunned to see a takeover bid for the corporate. Up to now, it’s typically been the topic of takeover hypothesis.