HSBC has upgraded its rating for Sonova (SONVY, Financial) from Hold to Buy, adjusting the price target to CHF 290, down from CHF 310. This decision comes amidst an evaluation of the medical technology and life sciences sectors, assessing the risk/reward balance under various economic conditions, including stagflation and a weak macroeconomic environment.
In its analysis, HSBC suggests that the industry’s recent multiples correction is under scrutiny. There is ongoing debate regarding whether this represents a buying opportunity or signals the onset of a recession. According to HSBC, a deeper look at historical sector multiples indicates a potential further compression of 20%-25% within a stagflation context. The analysis suggests that current stock prices do not yet account for a recession scenario.
