EU Medtech & Healthcare Services: Time to Buy Back confidence for the sector

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EU Medtech & Healthcare Services: Time to Buy Back confidence for the sector

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EU Medtech & Healthcare Services

Time to Buy Back confidence for the sector

Industry Overview

Share buybacks. A shot in the arm for MedTech? 19 June 2026

What would it take for MedTech to work again? We recently published a report arguing Equity

that an attractive 2026–28 product cycle could drive both sales and profit growth (see Europe

note; Product cycles as the antidote to derating? Catalyst path into 2026-28). Beyond Medical Technology

that, we see the sector’s de-rating as creating room for companies to launch or Julien Ouaddour >>

accelerate buybacks, supported by stronger balance sheets, peak FCF generation/yields, Research Analyst

and valuations well below prior repurchase cycles. Management teams buying back stock BofASE+33 1 8770(France)0614

would send a strong signal to the market and add support to earnings growth in a sector julien.ouaddour@bofa.com

we still view as defensive, with revenue and EPS typically resilient across macro cycles. James Nin >>

Research Analyst

Healthier BS and FCF offer decent buyback firepower BofASEjames.nin@bofa.com(France)

Looking across the sector, we believe EU MedTech balance sheets have materially Anna Ractliffe >>

improved in recent years, with average net debt expected at 1.6x in 2026 (1.4x in 2027), Research Analyst

down consistently from 2.0x in 2022. This reflects a stronger focus on cash generation MLIanna.ractliffe@bofa.com(UK)

and working capital discipline, driving FCF conversion to 12% versus 9% in 2022 and an

FCF yield of 7%. If the sector were to return to a historically acceptable 2.0x net debt

level by CY27E, we estimate that up to 14% of total sector market cap could be BS = Balance Sheet