Morningstar has initiated coverage on the medical device manufacturer, Polynovo (ASX:PNV).

The market’s high expectations regarding the rate and extent of Polynovo’s commercial rollout of medical devices may be over ambitious, according to the brokerage.

It also suggests that the market may be underestimating the impact of competitive pressures.

Despite the market’s optimism, Polynovo’s shares remained steady at A$1.335.

Morningstar warned that the company could have little to fend off intensified competition over the next ten years.

Echoing a sentiment of uncertainty, Morningstar assigned a fair value estimate of A$1.00 and a ‘very high’ uncertainty rating.

Looking to the future, the company predicts a five-year group revenue cumulative annual growth rate of 26% going into FY28.

As per LSEG data, out of seven analysts, six rate the stock as ‘buy’ or higher and one as ‘sell’.

The median target is A$2.0.

As of the last closing, Polynovo shares were down by 33.9% year-to-date.

Polynovo is a medical device maker specializing in the rapid commercialization of medical devices.