Sotera Health stock explodes 99% higher on news of legal settlement

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Yahoo Finance's Seana Smith, Josh Schafer, and Dave Briggs discuss why Sotera Health stock is surging 99% on Tuesday.

Video Transcript

SEANA SMITH: Let's start with Sotera Health. Shares are surging today. Look at that-- up 99%. The move to the upside coming after reaching a $408 million agreement to settle more than 870 legal cases in Illinois. Now Sotera is the parent company of Sterigenics, which is accused of illegally releasing a cancer causing waste at one of its facilities in Illinois. Now the plant permanently closed back in 2019.

Wall Street weighing in on the news. Let's talk about why a $408 million settlement is going to send shares surging by this amount. Barclays thinking that the settlement should be viewed as, quote, "a risk clearing event." Keybanc saying that the agreement is, quote, "manageable outcome." This certainly does explain the massive jump that we're seeing in shares, which I guess have really been hindered by the fact that we didn't know how large potentially this agreement was going to be.

JOSH SCHAFER: Yeah, Seana, and I'll add to that another firm coming out, too. Wolfe Research saying that this was, quote, "far better than the Street had feared and far earlier than reasonable minds expected." And they said the stock is, quote, "ready to rock." And so it seems like people were sort of just waiting to see this headwind get cleared. I saw a bunch of different price targets sort of ranging from the stock maybe closer to fair value between $15 to $25 once this headwind gets cleared, and then you can sort of see how the business is operating. So I think good news clearly for Sotera Health today, up almost 100% now.

SEANA SMITH: Yeah, which is incredible.

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