Stryker: Solid Long-Term Investment

Last Updated: 16. November 2023By

Although the stock market has been rising sharply recently, you should keep an eye on the risks and also look at less spectacular stocks that are characterized by high continuity. Stryker is one of them.

Short Profile of Stryker The US medical technology company produces high-tech implants for oral, jaw and facial surgery, as well as artificial knee, hip and shoulder joints. In addition, Stryker offers operating technology, surgical robots, trauma systems and endoscopy systems. Accessories and consumables for patient care, as well as products for accident care such as stretchers, round off the range.

Raising Annual Forecast After the strong first half of the year, the company raised its forecast for the full year. Your portfolio value now expects a growth in revenue in the range of 9.5 to 10.5%, previously it was 8 to 9%. The earnings forecast for 2023 was also increased: Instead of 10.05 to 10.25 US dollars, it should now be 10.25 to 10.45 US dollars.

Third quarter also exceeded expectations The report for the third quarter recently released also exceeded analyst forecasts. Stryker increased its sales by almost +10% to 4.91 billion US dollars. The adjusted profit rose disproportionately by +16% to 2.46 US dollars per share, thus exceeding the average analyst forecast by 3 cents.

Back on the path to success after the pandemic Stryker is a model of continuity: year after year the company manages to increase sales and profits. The Corona pandemic caused a brief interruption of this series. Because in many clinics, non-life-saving operations had to be postponed, which had a negative impact on Stryker’s business in 2020 and for the first time in a long time resulted in a (slight) decrease in sales and earnings.

Since then, the medical technology company has long been back on the path to success. Sales and earnings have reached new records in 2021 and 2022. For the current year, analysts expect growth in both sales and profits in the high single digits.

Next year the growth rate could increase again and give Stryker growth rates of over 10%. In the long term, growth should oscillate in the high single digits.

Quality has its price on the stock exchange Stryker’s share has been in an upward trend for many years. Interim course corrections were quickly made up again.

Bargain hunters may be disappointed, however, as quality stocks like Stryker are almost always traded with a certain valuation premium – as the price-earnings ratio (P/E) of 25 shows. Quality and resilience to crises have their price on the stock exchange and should justify the (currently acceptable) valuation premium for long-term investors.