Is an Analyst Upgrade and Higher Earnings Outlook Altering the Investment Case for STERIS (STE)?

• Earlier this week, STERIS received an analyst upgrade citing an upward revision in earnings estimates, highlighting perceived improvement in its business outlook.
• This upgrade has drawn increased attention to STERIS's performance in the healthcare sector, where recurring institutional adjustments often reflect shifting investor sentiment around sector trends and earnings visibility.
• We'll now assess how the recent analyst upgrade, driven by higher earnings estimates, might influence STERIS's overall investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

STERIS Investment Narrative Recap

To be a STERIS shareholder, you need to believe in the global push for infection prevention, healthcare infrastructure upgrades, and the company’s proven ability to deliver steady recurring revenue. The recent analyst upgrade, reflecting higher earnings estimates and improved sentiment, may enhance near-term confidence, but it does not materially change the most important short term catalyst, order backlog strength, or reduce ongoing risks like margin pressures due to rising input costs and healthcare customer spending constraints.

STERIS’s latest quarterly earnings report, issued on November 5, 2025, showed solid growth in both sales and net income, and management maintained its outlook for the fiscal year with projected revenue growth of 8-9%. This steady financial progression and reaffirmed guidance directly support investor focus on STERIS’s ability to sustain demand and profitability in the evolving healthcare sector.

Yet, in contrast to the boost in optimism, investors should still keep a close eye on the impact of rising tariffs and cost pressures, especially if STERIS is unable to...

Read the full narrative on STERIS (it's free!)

STERIS is projected to achieve $6.8 billion in revenue and $1.0 billion in earnings by 2028. This outlook assumes annual revenue growth of 6.8% and a $352 million increase in earnings from the current $647.7 million.

Uncover how STERIS' forecasts yield a $278.38 fair value, a 6% upside to its current price.

Exploring Other Perspectives

Three member-sourced fair value estimates from the Simply Wall St Community for STERIS range widely from US$197.03 to US$278.38 per share. While many see catalysts in robust order backlogs and recurring revenue strength, keep in mind that margin risks from tariff hikes remain a central concern for future performance, so consider how these varied valuations reflect differing risk appetite and outlooks.

Explore 3 other fair value estimates on STERIS - why the stock might be worth 25% less than the current price!

Build Your Own STERIS Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your STERIS research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free STERIS research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate STERIS' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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