Analyst downgrades pressure medtech stocks

Several medical device companies took hits yesterday after analysts on Wall Street downgraded their stocks, on a day when the major market indices each closed up a hair, and even medtech firms that enjoyed upgrades came under pressure.

Globus Medical (NYSE:GMED) suffered the most after Morgan Stanley analyst David Lewis cut his rating on the stock from “overweight” to “equal-weight,” sliding -8.5% to a $39.61-per-share close yesterday, compared with the prior day’s closing price.

In fact, Lewis’s downgrades led the pack in terms of impact, taking Insulet (NSDQ:PODD) and Hologic (NSDQ:HOLX) shares down some -7.4% and -6.5%, respectively. Here’s a look at some of yesterday’s downgrade action:

DOWNGRADES
Company	Analyst	Old rating	New rating	Close 1/2/19	%
Globus (GMED)	Morgan Stanley	Overweight	Equal-Weight	$39.61	-8.5%
Insulet (PODD)	Morgan Stanley	Hold	Hold*	$73.43	-7.4%
Hologic (HOLX)	Morgan Stanley	Equal-Weight	Under-Weight	$38.42	-6.5%
Abbott (ABT)	Citigroup	Neutral	Sell	$69.50	-3.9%
Medtronic (MDT)	Citigroup	Buy	Neutral	$87.92	-3.3%
Henry Schein (HSIC)	Robert W. Baird	Outperform	Neutral	$76.39	-2.7%
Smith & Nephew (SNN)	JP Morgan	Overweight	Neutral	$36.40	-2.6%
Bayer (BAYN)	JP Morgan	Overweight	Neutral	$17.40	-1.0%
*cut price target

The upgrade picture was murkier, with a trio of medical device companies taking hits despite upgrades, but three others gaining (including a bullish move from Lewis on shares of Baxter (NYSE:BAX)):

UPGRADES
Company	Analyst	Old rating	New rating	Close 1/2/2019	%
Tactile Systems (TCMD)	Northland Capital	Under Perform	Market Perform	$44.59	-2.1%
Stryker (SYK)	Evercore ISI	In-line	Outperform	$154.50	-1.4%
Zimmer Biomet (ZBH)	Citigroup	Neutral	Buy	$102.28	-1.4%
Bausch Health (BHC)	Piper Jaffray	Neutral	Overweight	$20.23	0.1%
Baxter (BAX)	Morgan Stanley	Under-Weight	Overweight	$65.30	0.8%
	Citigroup	Neutral	Buy
Apollo Endosurgery (APEN)	Northland Capital	Under Perform	Market Perform	$3.65	5.8%

By way of comparison, the three major U.S. market indices all closed up a hair yesterday, with the Dow Jones Industrial Average closing up 0.1% at 23,346.24. The S&P 500 also closed up 0.1%, at 2,510.03, and the NASDAQ index ended at 6,665.94, up 0.5%.