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  • Alex Hattaway

‘Mixed signals’ from medtech management suggest industry had bumpy end to 2022: analysts

Updated: Jan 14

By MEDTECHDIVE



Dive Brief:

  • Medtech management teams have given “mixed signals” in the year’s first set of company presentations, leading analysts to speculate that 2022 “may have closed out a bit softer” than expected.

  • Analysts at Goldman Sachs made the comment after hearing from medtech firms that the recovery of U.S. procedure volumes was “muted and uneven” in the fourth quarter as “hospital staffing issues and worker absenteeism due to flu and COVID” throttled growth.

  • Looking further forward, the team at Morgan Stanley warned that 2023 “could be choppy,” particularly in the first half of the year, because of hospital staffing and disruption in China.

Dive Insight:


Late last year, medtech management teams sounded confident about ending 2022 on a high note. Analysts at Goldman Sachs detected a shift in tone in the first presentations of 2023 with executives reporting a muted, uneven recovery in the U.S. and “soft/lumpy” volumes in China because of waves of COVID-19 cases.


Intuitive Surgical said “the impact from COVID accelerated as the quarter progressed, resulting in a significant reduction in China procedures that they expect will continue into 1Q,” according to the Goldman analysts. The robotic surgery leader also said customers are being cautious on budgets.


Analysts at Morgan Stanley looked beyond the near-term commentary to sketch out how medtech may perform across 2023. While the analysts expect 2023 to be a better year for medtech, they “don’t expect performance to be linear” and downgraded the industry from “attractive” to “in-line.”


The downgrade reflects the expectation that “macro factors will continue to broadly weigh on the industry relative to the market and healthcare.” The analysts also expect “ongoing staffing limitations” to limit the pace of recovery and are looking “for ongoing evidence that utilization levels are returning to pre-pandemic levels.”


Mergers and acquisitions could pick up this year after a “muted deal flow” in 2022, according to the Morgan Stanley team, although “commentary continues to point to tuck-in style deals versus transformative acquisitions.”


The analysts identified Zimmer Biomet as a company that “appeared open to larger opportunistic deals” and Abbott as a business capable of making a bigger acquisition.

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