Janus Henderson UK Responsible Income Fund on Smith & Nephew plc
Thesis
Smith & Nephew disappointed by cutting its full-year 2026 revenue target after previously setting growth targets, and the subsequent CFO departure added to negative sentiment. After the share-price fall, the managers believe the recent bad news is already reflected in the valuation. They therefore continue to hold the position rather than treating the operational disappointment as a reason to exit. ([Smith & Nephew][5])
“Following the share price fall, we believe that the recent news flow is reflected in the share price and therefore continue to hold the position.”
Key risks
- Further revenue-growth downgrades
- Management disruption following the CFO departure