On Aug 28, we retained
) at Neutral, following its mixed second-quarter results.
Although the company's solid top-line growth is impressive,
foreign exchange headwinds from international operations is a
matter of concern.
ALERE INC (ALR): Free Stock Analysis Report
EXACTECH INC (EXAC): Free Stock Analysis
ST JUDE MEDICAL (STJ): Free Stock Analysis
STRYKER CORP (SYK): Free Stock Analysis
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Why the Retention?
On Jul 18, Stryker posted second-quarter 2013 adjusted earnings
per share of $1.00, which were 3 cents lower than the Zacks
Consensus Estimate but higher than the year-ago earnings by 2%.
Revenues of $2,212 billion beat the Zacks Consensus Estimate of
$2,192. However, it grew modestly by 5% from the prior year due
to unfavorable impacts of prices and foreign exchange movements
that strongly offset the company's healthy sales across all the
The company's earnings have managed to beat the Zacks Consensus
Estimate in 2 out of the last 4 quarters, with an average
negative surprise of 0.27%. In the last 60 days, the Zacks
Consensus Estimate for 2013 and 2014 dropped 1.4% and 0.6% to
$4.23 and $4.64, respectively. Due to negligible changes in
estimates, SYK has a Zacks Rank #3 (Hold).
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. Moreover, the sequential
turnaround in the international business reflects positive impact
of the company's restructuring measures.
However, Stryker remains challenged by the inconsistency in
global capital-spending environment, pricing pressure along with
currency fluctuation and intense competition. Despite the raised
top line guidance for 2013, the tempered bottom line outlook due
to fluctuations in foreign exchange rates is a matter of concern.
Additionally, a series of product recalls is adversely affecting
some of its key segments.
Other Stocks to Consider
Medical stocks that are worth considering include
), carrying a Zacks Rank #1 (Strong Buy), along with
St. Jude Medical
), both carrying a Zacks Rank #2 (Buy).