Smith & Nephew (SNN) is at risk of reducing its 2026 guidance as the year progresses, outweighing any positive short-term drivers, RBC Capital Markets said in a Monday note.

The company's 12 Point Plan has been completed, and shares are up 22% in 2025, indicating that RBC's recovery thesis has largely played out, the analysts said.

Anticipated negative factors in 2026 mean that the company would need 7% organic growth just to hit its stated 6% growth target, which would be "challenging" based on historical results, the analysts said. They noted that new product launches are not expected to gain momentum until H2 of 2026, leading to the risk that the company may need to downgrade guidance during the year.

The company's new medium-term financial targets are potentially achievable from 2027, assuming the smooth execution of product launches and no surprise external negative factors, according to the note.

RBC downgraded the company's stock rating to sector perform from outperform and lowered the price target to 13.5 British pounds ($18.08) from 17 pounds.

Price: 32.27, Change: -0.36, Percent Change: -1.10