Medical Technology: Valuations down, should buybacks be up?

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Medical Technology: Valuations down, should buybacks be up?

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Medical Technology

Valuations down, should buybacks be up?

Industry Overview

We see this period as attractive buyback opportunity 08 June 2026

Medtech valuations (based on our coverage) are at decade lows, many stocks are trading Equity

at mid to high single digit FCF yields, the sector is not cyclical (revenue/EPS tends to United States

grow in any macro), FCF conversion has improved. We are seeing some buyback activity Medical Technology

and management open market purchases. However, our math suggests there’s enough Travis Steed

available FCF that buybacks could be even bigger during this period of lower valuations Research Analyst

(especially as management teams talk positively on utilization). We are seeing more BofAS+1 404 607 3251

private equity in medtech given these valuations. We think buybacks make more sense travis.steed@bofa.com

now for medtech. Stephanie Elghazi

Research Analyst

BofAS

+1 646 855 4568Medtech could repo LSD-MSD% of mkt cap in 12 months

stephanie.elghazi@bofa.com

We think medtech has the ability to materially step up buyback capacity. We estimate

Aidan Lahey

many medtech companies have the capacity to retire a LSD%-MSD% of their market cap Research Analyst

via repurchases in the next 12 months from FCF (not using balance sheet or cash BofAS

+1 646 855 2590

balance). On average, over the last 5 years, medtech companies have bought back aidan.lahey@bofa.com

around 6.5% of their current market caps over the entire 2020-2025 period. Over 2020- Enjia Cao

2025 companies deployed ~43% of FCF to buybacks on average. Research Analyst BofAS

+1 646 743 9861

Many stock prices on $ basis below historical buybacks enjia.cao@bofa.com