It’s been a grim couple of months for Smith & Nephew (LSE:SN.) and its share price. After hitting 14-month peaks in September, the FTSE 100 business has shed a whopping 21% of its value.

Following a chilly trading update Thursday (31 October), it’s dropped back below £10 a share. And it’s still slipping in end-of-week trade.

As a long-term investor, I’m considering whether this represents a prime dip-buying opportunity. Are Smith & Nephew shares now a brilliant bargain?

Forecasts downgraded

Smith & Nephew manufactures a range of healthcare products. It’s a market leader in medical devices, along with artificial limbs and hips and products to treat wounds. And it spooked investors on Halloween by slashing its full-year forecasts.

Revenues growth in 2024’s now tipped at 4.5%, a sharp downgrade from the previously predicted 5-6%.

Trading profit margins are now forecast at “up to” 18% versus 17.5% in 2023. But this is lower than a reading of “at least” 18% previously expected. And for 2025, margins are predicted at 19-20%, down from a formerly predicted 20%.

Smith & Nephew’s suffering from weak conditions in China, and particularly at its Orthopaedics division. Group sales rose 4% in the third quarter to $1.4bn. But stripping out Chinese revenues, turnover was up 5.9% year on year.

Fragile China

China’s an enormous growth market for the company. However, destocking and rising local competition seems to be impacting Orthopaedics sales. And regarding the latter, Panmure Liberum analysts say that “it isn’t clear whether Smith & Nephew will be able to recover these revenues“.

The FTSE firm’s suffering too as the Chinese economy struggles. It had hoped the country’s centralised Volume-Based Procurement (VBP) policy would boost the number of medical procedures being performed. But the economic downturn means this hasn’t happened, hitting Sports Medicine sales as well.

Looking good long term

The issues Smith & Nephew face could take time to ease. So Thursday’s third-quarter update might not be the last trading statement to scare the market.

Having said that, I think now could be a good time to consider investing. Over the long term, demand for healthcare products is tipped to boom, driven by steady population growth and rising investment in emerging markets.

I’m certainly expecting sales to rebound sharply in China when the economic landscape improves.

It’s also encouraging to see the progress the company’s making in the US, and especially in the area of hip and knee implants.

Smith & Nephew’s diversified range of products positions it to capitalise on this structural opportunity. Its long history of innovation and creating market-leading products bodes well, as does its strong position in the fast-growing field of robotics.

For 2025, Smith & Nephew shares trade on a forward price-to-earnings (P/E) ratio of just 11.3 times. It also deals on a sub-1 price-to-earnings growth (PEG) ratio of 0.6, another figure that underlines its cheapness.

While it isn’t without risks, I think Smith & Nephew’s a great share for patient investors to consider.