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Here's Why You Should Add Stryker (SYK) to Your Portfolio

Zacks Equity Research

Stryker Corporation SYK is poised for growth on solid second-quarter show, international growth and strong view.

Price Performance

Shares of this Zacks Rank #2 (Buy) stock have gained 28.5%, outperforming the industry’s growth of 3.2% on a year-to-date basis. Moreover, the stock has outpaced the S&P 500 Index’s rally of 0.8%.

Factors to Boost Stryker

Solid Q2 Results

Stryker delivered second-quarter 2019 adjusted earnings per share (EPS) of $1.98, beating the Zacks Consensus Estimate by 2.6%. The bottom line improved 12.5% year over year and exceeded the high end of the company’s guidance.

The Michigan-based medical device company reported revenues of $3.65 billion, which surpassed the Zacks Consensus Estimate by 1.4%. Revenues increased 9.9% on a year-over-year basis and 11.5% at constant currency.

Notably, the company gained on solid contributions from its three major segments — Orthopaedic, MedSurg and Neurotechnology & Spine.

Stryker Corporation Price and Consensus


Stryker Corporation Price and Consensus

Stryker Corporation price-consensus-chart | Stryker Corporation Quote

International Expansion

In the second quarter, Stryker’s international organic sales grew 6.5%. Per management, robust gains in emerging markets, Europe and Australia were responsible for the rise in international organic sales.

Notably, the company sold 44 Mako robots globally in the quarter.

View Strong

Based on the second-quarter performance, Stryker now expects 2019 organic net sales growth in the range of 7.5-8%.

On a full-year basis, adjusted EPS is expected in the band of $8.15 to $8.25.

For the third quarter of 2019, adjusted EPS is anticipated within $1.87 and $1.92.

Which Way Are Estimates Headed?

For 2019, the Zacks Consensus Estimate for revenues is pegged at $14.87 billion, indicating an improvement of 9.3% from the year-ago period. For adjusted EPS, the same is pinned at $8.21, suggesting growth of 12.3% year-ago reported figure.

For the third quarter, the Zacks Consensus Estimate for revenues is pinned at $3.5 billion, calling for year-over-year growth of 10.5%. The same for adjusted EPS stands at $1.90, suggesting a rise of 12.4% year over year.

Other Key Picks

Other top-ranked stocks in the broader medical space are DENTSPLY SIRONA XRAY, Intuitive Surgical ISRG and Baxter International BAX, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DENTSPLY’s long-term earnings growth rate is expected to be 11.5%.

Intuitive Surgical’s long-term earnings growth rate is estimated at 13.3%.

Baxter’s long-term earnings growth rate is projected at 12.8%.

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