Stryker’s Mixed Performance and Valuation Concerns Justify Hold Rating with Adjusted Price Target

Richard Newitter, an analyst from Truist Financial, maintained the Hold rating on Stryker. The associated price target was lowered to $392.00.

Richard Newitter has given his Hold rating due to a combination of factors including Stryker’s mixed financial performance and valuation considerations. The company reported a slight revenue beat with mixed quality earnings, where certain segments like MedSurg and Neurotechnology underperformed, while others like Orthopedics showed strength. Despite a positive earnings per share (EPS) beat, it was largely driven by non-operational items such as tax benefits, rather than core operational improvements.
Additionally, Newitter adjusted the price target to $392 from $407, reflecting a forward valuation that is at a premium to the S&P 500, but below Stryker’s historical average premium. This premium is justified by Stryker’s high-quality, above-average revenue growth. However, for a more favorable rating, Newitter would require greater confidence in the company’s potential for faster EPS growth. The impact of tariffs and other external factors also contribute to the cautious outlook, suggesting that while there are positive elements, uncertainties remain that warrant a Hold rating.

Based on the recent corporate insider activity of 59 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SYK in relation to earlier this year.