Shares of Stryker Corp SYK rallied to a new 52-week high of $106.92 on Mar 29, eventually closing a tad bit lower at $106.87. This represents a strong one-year return of about 15.9%. Meanwhile, the S&P 500 posted a negative return of almost 0.6% during the same period.
On an average, Stryker outperformed the Zacks Consensus Estimate by 1.67% over the last four quarters. This Zacks Rank #3 (Hold) stock has a market cap of $39.21 billion and a long-term expected earnings growth rate of 9.2%.
Key Growth Catalysts
Stryker's expanding product portfolio is a key growth catalyst in our view. The company's recent back-to-back acquisitions of Physio-Control International, Synergetics USA and Sage Products LLC are expected to drive overall growth. Further, these deals allow the company to foray into new markets.
The strong growth prospects from these deals have encouraged Stryker to revise its earnings growth projections for full-year 2016. Adjusted earnings are now expected in the band of $5.57-5.77 per share, reflecting year-over-year growth of 8.8%-12.7%. This includes a negative impact of almost 2.5% from unfavorable foreign exchange rate.
For 2017, Stryker expects the acquisition of Sage Products and Physio-Control to prove accretive to earnings by 15-18 cents. The Sage Products deal (all-cash transaction worth $2.78 billion), once completed, will be Stryker's biggest-ever acquisition.
The Zacks Consensus Estimate for full-year 2016 has increased by a penny to $5.61 over the last 60 days. During the same time frame, full-year 2017 estimates increased by three cents to $6.17 per share.
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