Stryker's Strategic Moves Impress Analysts, Spine Implant Sale and NARI Deal Set to Drive Future Growth

Anusuya Lahiri

January 29, 2025

Wall Street analysts rerated Stryker Corp (NYSE:SYK) Wednesday after the company’s fourth-quarter print.

Stryker reported quarterly earnings of $4.01 per share, which beat the analyst consensus estimate of $3.87. The company reported quarterly sales of $6.44 billion, up by 10.7%, which beat the analyst consensus estimate of $6.36 billion.

Also Read: Nasdaq Touts 10% Revenue Growth In Q4, Sets 2025 Expense And Tax Guidance

Several analysts rerated the stock:

Stifel analyst Rick Wise maintained Stryker with a Buy and raised the price target from $400 to $440.
Needham analyst Mike Matson reiterated Stryker with a Buy and a $442 price target.
RBC Capital analyst Shagun Singh Chadha maintained a Buy on Stryker and set a price target of $435.
Piper Sandler analyst Matthew O’Brien reiterated a Buy on Stryker with a price target of $420.

Stifel: Stryker delivered an excellent finish to the year 2024, turning in better-than-expected fourth-quarter performance across multiple key metrics: sales, margins, and EPS. Impressively, this above consensus performance bookended the company’s fourth consecutive double-digit organic sales growth year.

Simultaneous with the earnings release, Stryker also announced the planned retirement of long-time CFO Glenn Boehnlein and the imminent sale of the lower-growth Spine Implant business.

Without offering transaction proceed specifics, Stryker highlighted an anticipated first-half U.S. Spine Implant close with international divestitures to follow. Historically growing below the corporate average sales growth rate, Wise remains inclined to view the Spine Implant sale positively for Stryker.

Wise projected first-quarter revenue of $5.67 billion and EPS of $2.68.

Needham: Stryker’s fourth-quarter revenue and EPS beat consensus, and management provided 2025 revenue guidance that bracketed consensus and EPS guidance above consensus.

Stryker again saw broad-based strength across most of its businesses, driven by substantial procedure volumes, new products, and its capital equipment backlog. Organic sales growth slowed to 10.2% in the fourth quarter from 11.5% in the third quarter.

Stryker’s gross margin was up 140 bps Y/Y, but its operating margin was up 200 bps Y/Y. Stryker also announced the retirement of CFO Glenn Boehnlein and divesting its spine implant business, with the deal expected to close in the first half. Matson noted that 2025 guidance is likely to prove conservative.

Matson projected first-quarter revenue of $5.64 billion and EPS of $2.80.

RBC Capital: Stryker delivered a strong exit to 2024, beating fourth-quarter consensus estimates, and issued a strong initial 2025 guide for organic sales, margins, and EPS growth.

Notably, Stryker is taking steps to improve its WAMGR with the sale of its spinal implant assets and the acquisition of NARI. After today’s call, Chadha is bullish on Stryker’s growth durability, the trajectory for operating margin expansion, and EPS growth.

Chadha projected first-quarter revenue of $5.65 billion and EPS of $2.70.

Piper Sandler: Stryker also reported fourth-quarter results and guided for fiscal 2025. Both were ahead of Street expectations. More specifically, Stryker is guiding organic revenue growth of 8%-9%, which O’Brien noted as achievable, if not conservative.

Additionally, the company announced that their long-time CFO, Glenn Boehnlein, will retire and be replaced by Preston Wells (which impressed O’Brien).

Finally, Stryker is selling its U.S. spinal implants business and expects to close its acquisition of NARI by the end of next month, which collectively should improve its addressable WAMGR.

When putting these two updates together with continued strong performance from the core business, O’Brien noted Stryker is set up to continue delivering some of the best growth in large-cap, diversified med tech, which keeps the analyst constructive on the name.

O’Brien projected first-quarter revenue of $5.69 billion and EPS of $2.71.

Price Action: SYK stock is down 0.20% at $394.38 at the last check on Wednesday.

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