STERIC plc Faces Market Challenges Amid Positive Earnings Growth
Ohio-based STERIS plc (STE) specializes in developing, manufacturing, and marketing products aimed at infection prevention, decontamination, microbial reduction, as well as surgical and gastrointestinal support. The company is currently valued with a market cap of $21.3 billion and operates in three segments: Healthcare, Applied Sterilization Technologies (AST), and Life Sciences.
STE’s Stock Performance Lags Behind the Market
Over the past 52 weeks, STERIS shares have had lackluster performance compared to the broader market. While STE has gained 8%, the S&P 500 Index ($SPX) has surged by 31.8%. Year-to-date, STE’s stock is down 1.2%, in stark contrast to the SPX’s 25.8% increase.
Comparison to Healthcare Sector
When focusing on the healthcare sector, STE’s struggles become even clearer. The Health Care Select Sector SPDR Fund (XLV) has reported a 12.8% gain over the past year, alongside a nearly 7.8% return year-to-date.
Q2 Earnings Report Highlights
Following its Q2 earnings release on November 6, shares of STE dropped by 5.3%. The company reported a 7.3% rise in revenue year-over-year, totaling $1.3 billion, in line with Wall Street expectations. Adjusted earnings saw a 15% annual increase, reaching $2.14 per share, narrowly beating analyst projections.
Future Earnings Projections
For the fiscal year ending March 2025, analysts forecast STE’s earnings per share (EPS) to rise by 11.6% to $9.15. The company has a strong track record, having met or surpassed consensus estimates in the previous four quarters.
Analyst Recommendations and Future Outlook
Among the seven analysts tracking STE, the consensus rating is a “Strong Buy,” highlighting five “Strong Buy” and two “Hold” ratings. This rating reflects a slight improvement from three months ago, when only four analysts recommended a “Strong Buy.”
Upgrades and Price Targets
On October 24, Piper Sandler upgraded STE to an “Overweight” rating and set a price target of $260, indicating a potential upside of 19.5%. The average price target of $257.50 suggests an 18.4% increase from current levels, while the highest target of $265 points to a potential rise of 21.8%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
