JPM | US Healthcare: MedTech Prevs (BAX, BSX, DXCM, GEHC, SYK, GKOS and more), RYTM Init at OW, Biotech Recap, HCA, THC, MOH Recaps: US Healthcare Sector Specialist Commentary

Research evidence excerpt

JPM | US Healthcare: MedTech Prevs (BAX, BSX, DXCM, GEHC, SYK, GKOS and more), RYTM Init at OW, Biotech Recap, HCA, THC, MOH Recaps: US Healthcare Sector Specialist Commentary

-insulin intensive type-II diabetes expected sooner than later, we think a small beat on the top- and

bottom-line should be enough for shares to work here. The readthrough from Abbott skewed more negative on slowing CGM

market growth, which has us more cautious on the health of the current US and WW CGM markets going forward following a

1Q26 from Dexcom headlined by softer US sales and declining new US patient growth. Down the P&L, we’ll be looking for

margin leverage as the G7 15-day sensor continues to roll out, with a target ~50% US base conversion by the end of 2026.

SYK: Positioning has been switching from consensus long to consensus short wildly over the past few weeks as the seemingly

daily updates on procedure volumes trickle out. Heading into this week, with strong Ortho procedure comments from Tenent, the

bias is to the upside. The key here is not just quarter performance but management tone on the sustainability of procedure

volumes (especially in ortho and cardio) and the health of the capex markets. Coming out of our June NDR (here), the message

was that end-market fundamentals remain very healthy, with no signs of a procedure slowdown or capex weakening, the two

debates most likely to challenge the multiple. We expect organic sales upside in 2Q as some of the cyber-deferred 1Q sales are

recovered, think 75-100bps, though we believe most of the recovery lands in 2H, weighted toward made-to-order products and

capital in MedSurg. On earnings, management sounds very confident, absorbing the lost weeks and higher IT spend within the