Stock Strategist: Backlog Grows for Orthopedic Procedures

[Morningstar Logo]( [Company Site]( [Company News]( [Membership]( [Portfolio]( [Stocks]( [Options]( [Funds]( [ETFs]( [Markets]( [Tools]( [Personal Finance]( [Discuss]( Stock Strategist Backlog Grows for Orthopedic Procedures But the disruption caused by COVID-19 has little effect on the device industry’s moats. [tab_bar] by Debbie S. Wang | 7/6/2020 5:30:00 PM Though some medical device companies indicated that April would probably be the nadir of COVID-19-related cancellations of non-pandemic medical procedures in the United States, we continue to think that procedure volume for the orthopedic companies will remain under pressure into the second half of the year, especially now that populous states like Florida and Texas have seen alarming rises in new SARS-CoV-2 infections. We’re holding steady on our fair value estimates for Stryker [SYK]( Zimmer Biomet [ZBH]( and Smith & Nephew [SNN]( which have baked in our projection of a 75% decline in large joint replacement procedures for the second quarter, followed by a 50% decline in the same for the third quarter before further stabilization in the fourth quarter. Nonetheless, we see little in this near-term (albeit significant) disruption to procedure volume that holds implications for the wide and narrow economic moats that characterize the orthopedic device industry. To read more, click [here](. Sponsored Links [Buy a Link Now]( Podcast: Investing Insights From Morningstar.com Listen to a roundup of the latest videos featured on Morningstar.com [in this podcast]( available through iTunes. Free Issue | Morningstar's Stock Newsletter >> Morningstar StockInvestor is celebrating more than 10 successful years of high-quality stock investing. Its two real-money portfolios have outperformed the S&P 500 since 2001. [Get new ideas for the core of your stock portfolio.]( Search Most Recent Articles [Sharpening the Tools of the ESG Investor: Morningstar’s View]( [Is an Annuity Right for Your Client?]( [International Equity Funds Bounced in Second Quarter]( Latest Analyst Reports [NetEase]( [Johnson & Johnson]( [Eli Lilly]( [UBS Group]( [O'Reilly Automotive]( ABOUT OUR EMAIL To unsubscribe and update your preferences, go to our [email newsletter page](. All subscription changes will take effect within one business day. If you have questions about Morningstar.com or your membership, send a note to premium@morningstar.com. ABOUT OUR PRIVACY POLICY Please [click here]( to learn about Morningstar's privacy policy. (c) Copyright 2020. Morningstar, Inc. 22 W. Washington Chicago, Illinois, 60602 All rights reserved.