Stryker Share Price Forecast March 2022 – Time to Buy SYK?
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Shares of medical device maker Stryker (NYSE: SYK) are in the red today, after closing at $255.47 as of March 23rd (19:36 EDT). Stryker Shares have been beating out the S&P 500 returns for the last 5 years. The shares have increased 100% compared to the S&P 500’s gain of 90%. However, the company produced mixed earnings results for the fourth quarter.
Stryker – Technical Analysis
According to Stryker’s financial statement, the market cap of the company is at $96.451 billion with total assets worth $34.631 billion. Revenue for 2021 was at $17.11 billion with a profit margin of 11.66% compared to $14.35 billion in 2020. It reported $4.70 billion in net sales during Q4, up 10.3% over the year-ago period, which was higher than the $4.65 billion in revenue that analysts were expecting for the quarter.
Oscillators such as Relative Strength Index (14)(47.75), Stochastic %K (14, 3, 3)(71.43), Commodity Channel Index (20)(−0.69), Average Directional Index (14)(12.37) and Awesome Oscillator(7.35) are neutral. Moving averages such as Exponential Moving Average (10)(259.91), Simple Moving Average (10)(257.81), Exponential Moving Average (20)(258.41), Simple Moving Average (20)(258.92) and Exponential Moving Average (30)(257.86) are indicating a sell action.
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Recent Developments
Stryker Corporation is a medical technologies corporation that produces surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling and emergency medical equipment and other related medical products. It made an initial public offering of stock and later acquired Osteonics Corporation in 1979. The company markets its products to doctors, hospitals and other healthcare facilities in over 100 nations worldwide. The company is divided into three segments – Orthopedics, Medical and Surgical (MedSurg), and Neurotechnology and Spine.
In the last three years, Stryker has made some noteworthy acquisitions. This includes the acquisition of Arrinex, Inc., OrthoSpace, Ltd, Mobius Imaging, LLC and GYS Tech, LLC (DBA Cardan Robotics) and Wright Medical Group N.V. in 2019. This was followed by acquisitions of OrthoSensor, Inc and TMJ Concepts in 2021 and Vocera Communications in 2022.
Stryker has released a mixed earnings result for the fourth quarter ended Dec. 31. While it beat analyst revenue expectations during the quarter, it could not beat their consensus for non-GAAP (adjusted) diluted EPS. The company has managed to beat analysts’ revenue predictions in six out of the last eight quarters, despite the COVID-19 pandemic.
Most of the company’s revenue growth came from six product launches last year. Stryker’s next-generation surgical sponge counting technology known as the Surgi-Count+ safety-sponge system is a notable example. The company’s acquisition of Wright Medical Group, which didn’t close until November 2020, also contributed 2.1% of net sales. However, the company’s organic sales growth and growth from acquisitions were partially offset by unfavourable currency translations.
Should You Buy SYK Shares?
Investors have several reasons to buy Stryker shares. While its current 1% dividend yield isn’t going to blow investors away, there is a good chance that it will be raised at a healthy rate for the foreseeable future. The company has the flexibility to repay debt to drive earnings higher, complete bolt-on acquisitions and increase dividends, thanks to a dividend ratio of just 27.7%. The other reason is the company’s valuation. The shares are currently trading at around a 24.4 forward price to earnings ratio, which is lower than the 26.3 P/E ratios of the medical devices industry on the whole. Thus, the company’s fair valuation and strong fundamentals make it a good investment.
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