Stryker Corporation (NYSE:SYK) Analysts Are Pretty Bullish On The Stock After Recent Results

It's been a good week for Stryker Corporation (NYSE:SYK) shareholders, because the company has just released its latest annual results, and the shares gained 9.4% to US$341. It was a credible result overall, with revenues of US$20b and statutory earnings per share of US$8.25 both in line with analyst estimates, showing that Stryker is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Stryker after the latest results.

See our latest analysis for Stryker

Taking into account the latest results, the current consensus from Stryker's 28 analysts is for revenues of US$22.1b in 2024. This would reflect a modest 7.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 17% to US$9.76. Before this earnings report, the analysts had been forecasting revenues of US$21.8b and earnings per share (EPS) of US$9.79 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 7.7% to US$350despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Stryker's earnings by assigning a price premium. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Stryker, with the most bullish analyst valuing it at US$390 and the most bearish at US$242 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Stryker'shistorical trends, as the 7.6% annualised revenue growth to the end of 2024 is roughly in line with the 8.4% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.0% annually. So although Stryker is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Stryker. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Stryker analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Stryker that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.