Steris Hold Rating: Mixed Signals Amid Strong Q4 Performance and Cautious FY 2026 Outlook

Needham analyst Michael Matson has maintained their neutral stance on STE stock, giving a Hold rating on May 12.

Michael Matson has given his Hold rating due to a combination of factors surrounding Steris’s recent financial performance and future outlook. The company’s revenue and earnings per share for the fourth quarter of fiscal year 2025 surpassed market expectations, which is a positive sign. However, the guidance for fiscal year 2026, while slightly above consensus, is influenced by a smaller currency headwind, which may not reflect a significant underlying strength.
Additionally, although Steris experienced an increase in gross and operating margins compared to the previous year, the slowdown in organic revenue growth, particularly in the Healthcare segment, raises concerns. The backlog, while up year-over-year, has decreased sequentially, indicating potential challenges ahead. These mixed signals suggest a cautious approach, leading to the Hold rating as investors might want to wait for clearer signs of consistent growth before making further investment decisions.

In another report released on May 12, Morgan Stanley also maintained a Hold rating on the stock with a $240.00 price target.