UK stocks, as a whole, have had a decent run in 2024. Year to date, the FTSE All-Share index is up about 5%.

Yet there are still many stocks miles off their highs and have the potential to soar in the years ahead. Here’s a look at one that’s currently trading around 50% below its all-time highs.

Down a whopping 50%

Smith & Nephew’s (LSE: SN.) a medical technology business that’s focused on hip and knee implants, robotic surgery solutions, and trauma products. A FTSE 100 company, it currently has a market-cap of around £9bn.

As a long-term investor who likes to back big trends, I’ve always thought S&N has bags of potential from an investment perspective. This is due to the fact that the world’s population is ageing rapidly. As we age, our joints tend to break down. My grandfather was a great example here – after turning 70, he needed both knees and a hip replaced (too much golf).

The stock hasn’t done well in recent years though. That’s because it faced challenges due to the coronavirus. This significantly limited the number of joint replacement surgeries that could take place globally. As a result of this disruption, the company’s share price has fallen from near-£20 to around £10.

Poised for a rebound

The outlook’s now improving though. Across the world, elective surgeries are taking place again and there’s quite a large backlog for joint replacement procedures.

For example, a report published this month in the Medical Journal of Australia said that its national annual caseload would need to increase by 16% by the end of 2024, 10% by the end of 2025, or 8% by the end of 2026 to clear the backlog accumulated during the pandemic.

This leads me to believe there’s potential for a share price rebound here. Currently, the forward-looking P/E ratio here is just 12 using next year’s earnings per share forecast. That’s low for a high-quality healthcare company. Especially with analysts expecting earnings growth of 11% this year and 17% next. Given this low valuation, I believe those who are willing to be patient with this stock could be rewarded.

It’s worth noting that analysts at JPMorgan recently raised their target price for Smith & Nephew to 1,381p from 1,300p. That’s about 37% higher than the current share price. If the stock was to hit that level, investors could be looking at a total return of about 40% over the next 12 months once the 3% dividend yield is factored in.

I’m bullish

Now a key risk to the investment case is GLP-1 weight loss drugs like Wegovy. The uncertainty created by these drugs (in relation to demand for joint replacements) is one reason the share price is still down in the dumps.

However, it’s still too early to know if they’ll have any long-term impact on the industry. Some analysts believe they could actually help companies like Smith & Nephew as they’ll enable more people to qualify for surgery.

Personally, I believe that the outlook for this company remains attractive due to the ageing population. And at the current share price, I think its shares are a steal.

I actually wouldn’t be surprised to see a takeover bid for the company. In the past, it’s often been the subject of takeover speculation.