On Wednesday, BTIG maintained a Buy rating on Stryker Corporation (NYSE:SYK) and raised its shares target to $394 from $383 following the company's third-quarter results. Stryker reported revenue of $5.494 billion, a year-over-year increase of 11.9%, or 12.0% on a constant currency basis, and 11.5% organically.
These figures surpassed both BTIG's and Wall Street's estimates by 3.6% and 2.3%, respectively. The company's adjusted earnings per share (EPS) of $2.87 also exceeded estimates, coming in 3.9% higher than BTIG's forecast and 3.6% above the consensus.
The analysis highlighted standout performance in Stryker's Knees, Hips, and Medical segments, which helped offset weaker results in Neurovascular, Other, and Instruments divisions. Stryker's updated full-year 2024 guidance now anticipates organic growth between 9.5% and 10.0%, an increase from the previous range of 9.0% to 10.0%. The company also expects adjusted EPS to be in the range of $12.00 to $12.10, slightly ahead of the consensus estimate of $12.00.
Despite anticipating a lower implied organic growth rate of 7.5% to 8.0% for the fourth quarter of 2024, which is below Stryker's historical trend for what is typically a strong quarter, the company is confident in maintaining healthy procedural dynamics, favorable pricing, and product growth drivers. These factors are expected to support Stryker's premium growth trajectory into the fourth quarter of 2024 and beyond.
BTIG's analysis also pointed to various opportunities for Stryker to improve its operating margins (OMs), suggesting the possibility of an expansion of approximately 100 basis points or more in fiscal year 2025. The firm believes that Stryker's premium valuation is justified and anticipates that the stock will continue to rise.
In other recent news, Stryker Corporation reported third-quarter earnings and revenue that surpassed analyst expectations, leading to an upward revision of its full-year guidance. The medical technology company posted adjusted earnings per share of $2.87, outperforming the analyst consensus by $0.10.
Revenue for the quarter registered at $5.49 billion, exceeding estimates of $5.37 billion and marking an 11.9% YoY increase. This growth was propelled by an 11.5% rise in organic net sales, attributed to a 10.3% surge in unit volume and a 1.2% hike in prices.
Stryker's MedSurg and Neurotechnology segment led the growth with a 12.8% increase in net sales to $3.2 billion, while Orthopaedics and Spine net sales climbed 10.7% to $2.3 billion. The company's adjusted operating income margin expanded 130 basis points to 24.7% in the quarter.
In light of these recent developments, Stryker has raised its full-year 2024 outlook. The company now expects organic net sales growth of 9.5% to 10.0% and adjusted EPS in the range of $12.00 to $12.10, compared to the previous analyst consensus of $12.01.
InvestingPro Insights
Stryker Corporation's recent performance aligns with the positive outlook presented in the article. According to InvestingPro data, the company's revenue growth remains strong, with a 9.94% increase over the last twelve months as of Q2 2024. This robust growth is reflected in the company's market capitalization of $136.81 billion, underscoring its significant presence in the medical technology sector.
InvestingPro Tips highlight Stryker's consistent dividend growth, with a 6.67% increase over the last twelve months. This aligns with the company's solid financial performance and may appeal to income-focused investors. Additionally, Stryker's impressive one-year price total return of 38.03% as of the latest data suggests that the market has been rewarding the company's strong performance and growth prospects.
For readers interested in a deeper analysis, InvestingPro offers 16 additional tips for Stryker Corporation, providing a comprehensive view of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.