STERIS plc (NYSE:STE) Just Released Its Third-Quarter Results And Analysts Are Updating Their Estimates
The quarterly results for STERIS plc (NYSE:STE) were released last week, making it a good time to revisit its performance. STERIS beat revenue expectations by 3.5%, at US$1.4b. Statutory earnings per share (EPS) came in at US$1.42, some 2.6% short of analyst estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for STERIS
Taking into account the latest results, the consensus forecast from STERIS' eight analysts is for revenues of US$5.84b in 2025. This reflects a credible 7.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 18% to US$6.79. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.81b and earnings per share (EPS) of US$6.77 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$240, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on STERIS, with the most bullish analyst valuing it at US$265 and the most bearish at US$215 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that STERIS' revenue growth is expected to slow, with the forecast 6.3% annualised growth rate until the end of 2025 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that STERIS is also expected to grow slower than other industry participants.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that STERIS' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple STERIS analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - STERIS has 1 warning sign we think you should be aware of.
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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.
