On May 16, we retained
) at Neutral, following its first-quarter results. Stryker's
reported solid sales in the U.S. but international markets,
especially Europe, still remain weak.
Why the Retention?
On Apr 24, Stryker posted first-quarter 2013 adjusted earnings
per share of $1.03, which were 2 cents above the Zacks Consensus
Estimate. It transcended the year-ago earnings by 4%. Revenues
inched up 1.3% (2.6% in constant currency) year over year to
$2,190 million but missed the Zacks Consensus Estimate of $2,207
The company's earnings have managed to beat the Zacks
Consensus Estimate in 2 out of the last 4 quarters, with an
average surprise of 0.61%. It met the Zacks Consensus Estimate in
the second quarter of 2012 but missed it in the subsequent third
quarter. Following the earnings release, the Zacks Consensus
Estimate for 2013 and 2014 dropped 0.7% and 0.4% to $4.30 and
Stryker is one of the world's largest orthopedic companies and
we believe that it should benefit from new product launches,
expansion into emerging markets, cost control measures and
increasing operating efficiency. In the first quarter, it
completed the acquisition of Trauson Holdings to gain access to
the large value-oriented orthopedic market in China.
However, Stryker remains challenged by the inconsistency in
the international markets, global capital-spending environment,
pricing pressure along with currency fluctuation and intense
competition. Additionally, a series of product recalls is
adversely affecting some of its key segments.
Other Stocks to Consider
Stryker has a Zacks Rank #3 (Hold). While we remain on the
sidelines regarding SYK, medical stocks such as
) warrant a look. While Conceptus and Myriad carry a Zacks Rank
#1 (Strong Buy), ATRC carries a Zacks Rank #2 (Buy).
ATRICURE INC (ATRC): Free Stock Analysis
CONCEPTUS INC (CPTS): Free Stock Analysis
MYRIAD GENETICS (MYGN): Free Stock Analysis
STRYKER CORP (SYK): Free Stock Analysis
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