Key Takeaways STE is set to report Q3 on Feb. 4, with revenues seen at $1.48B and EPS at $2.53, up year over year. STERIS expects Healthcare momentum, with capital equipment orders robust and segment revenues up 8.1%. STE's AST and Life Sciences are seen growing about 8%, aided by organic growth and MedTech demand. STERIS plc (STE) is scheduled to release third-quarter fiscal 2026 results on Feb. 4, after market close.In the last reported quarter, the company posted adjusted earnings per share (EPS) of $2.4 ...

Core Viewpoint - STERIS plc will host a conference call to discuss its fiscal 2026 third quarter results on February 5, 2026, at 9:00 a.m. ET, with a press release detailing financial results to be issued after the U.S. market closes on February 4, 2026 [1][2]. Company Information - STERIS is a leading global provider of products and services that support patient care, focusing on infection prevention and aiming to create a healthier and safer world through innovative healthcare and life science products and services [3]. Conference Call Details - The conference call can be accessed live at www.steris-ir.com or by phone at 1-833-535-2199 in the U.S. and 1-412-902-6776 internationally [1]. - A replay of the conference call will be available starting at 12:00 p.m. ET on February 5, 2026, with access codes provided for both U.S. and international listeners [2].

Core Insights - The U.S. medical instrument and medtech sector is stabilizing as it enters 2026, with normalized procedure volumes post-pandemic and a focus on productivity and cost management [1][3] - Companies that can demonstrate operational improvements and earnings visibility are favored in the current investment environment, despite modest top-line growth [1][6] U.S. Macro Trends - Medtech equities are influenced by U.S. macroeconomic factors, particularly the Federal Reserve's interest rate policy, which is currently targeted between 3.5% and 3.75% [3] - Elevated labor and materials inflation rates have moderated, impacting margins more than demand, as companies align pricing and productivity with cost structures [4] Hospital Dynamics - U.S. hospitals are managing tight capital budgets while maintaining steady procedure volumes, benefiting companies with strong service and consumables revenue rather than those reliant on large equipment sales [5] - Staffing shortages are driving hospitals towards automation and efficiency, creating opportunities for device manufacturers offering productivity-enhancing solutions [5] Investment Opportunities in Undervalued Stocks - Undervalued medtech stocks may outperform through earnings recovery and multiple re-rating, as historical periods of uncertainty often compress valuations [6][7] - "Undervalued" stocks are defined as those trading below their historical valuation ranges, with potential for earnings growth through operational leverage and cost-reduction initiatives [7] Company-Specific Insights Fresenius Medical Care (FMS) - FMS is experiencing margin recovery due to cost savings and pricing improvements, with a current P/S F12M of 0.55x, below its 5-year median of 0.63x [10][11] - The company reported a rise in operating margin to 11.7% for Q3 2025, supported by cost savings and disciplined execution, with an expected earnings growth of 9% in 2026 [11][13] Integra LifeSciences (IART) - IART operates in neurosurgery and surgical instruments, currently trading at a P/S F12M of 0.59x, below its 5-year median of 2.14x [14][15] - The company anticipates supply normalization and margin expansion initiatives targeting $25-$30 million in savings, with expected earnings growth of 5.5% in 2026 [15][16] STERIS (STE) - STERIS provides sterilization services and is currently trading at a P/S F12M of 4.23x, slightly above its 5-year median of 3.97x [18][19] - The company reported high-single-digit organic revenue growth and expanded EBIT margin to 23.1%, with an expected earnings growth of 8.6% in 2026 [19][21]

Core Insights - STERIS plc (STE) is positioned for growth in the upcoming quarters, driven by its Healthcare segment and strong market adoption of its offerings, including infection prevention consumables and capital equipment [1] - The Applied Sterilization Technologies (AST) segment is experiencing robust service revenue growth, contributing positively to the company's overall performance [1] - The company has demonstrated sound financial health, enhancing its attractiveness as an investment [1] Financial Performance - STERIS has a market capitalization of $25.44 billion and an earnings yield of 3.9%, significantly higher than the industry's 0.5% yield [3] - In the past year, STERIS shares have increased by 26.7%, outperforming the industry growth of 5% and the S&P 500's rise of 21.1% [2] - The Zacks Consensus Estimate for STERIS' fiscal 2026 earnings per share (EPS) indicates a 10.9% increase to $10.23, with revenues expected to reach $5.93 billion, reflecting an 8.6% growth from fiscal 2025 [12] Healthcare Segment Performance - The Healthcare segment reported a revenue growth of 9% year over year in the second quarter of fiscal 2026, driven by a 10% increase in consumable revenues and a 4% increase in capital equipment revenues [4][7] - Service revenues in the Healthcare segment increased by 13% year over year, with order growth exceeding 3% year to date [4][7] - Margins improved due to increased volume, favorable pricing, and productivity gains, despite challenges from tariffs and inflation [4] AST Segment Performance - The AST segment achieved a 10% growth year over year in the second quarter of fiscal 2026, primarily due to a 13% increase in service revenues [5][7] - The segment benefits from a global network of over 50 contract sterilization and laboratory facilities, with a focus on ethylene oxide (EO) sterilization for single-use, sterile technologies [5] Financial Health - As of the end of the second quarter of fiscal 2026, STERIS had $319 million in cash, a long-term debt of $1.90 billion (down 0.3% sequentially), and no short-term debt [9][7] - The total debt-to-capital ratio was 21.3%, indicating a favorable solvency position [9] Market Challenges - The macroeconomic environment poses challenges, with rising healthcare costs impacting financial operations and increasing production costs due to raw material price fluctuations and tariffs [10] - STERIS faces intense competition from both large companies with extensive product portfolios and smaller firms, which may have greater resources for product development [11]

Company Overview - STERIS plc, based in Mentor, Ohio, specializes in infection prevention, decontamination, microbial reduction, and surgical and gastrointestinal support products and services, founded in 1985 [1] - The company's current market capitalization is $24.5 billion, with the Q3 2026 earnings report expected to be released soon [1] Earnings Expectations - Analysts predict STERIS will generate earnings of $2.53 per share for Q3 2026, reflecting a 9.1% increase from $2.32 per share in the same quarter last year [2] - For fiscal 2025, the expected EPS is $10.23, indicating an 11% increase from $9.22 reported in fiscal 2024, with further growth anticipated to $11.11 in fiscal 2027, an 8.6% year-over-year increase [3] Stock Performance - Over the past 52 weeks, STERIS shares have increased by 25.5%, outperforming the S&P 500 Index's 17.1% rise and the State Street Health Care Select Sector SPDR ETF's 14.3% return [4] - Following the release of its Q2 2026 earnings, STERIS shares closed up by 6.9%, with quarterly revenue reported at $1.5 billion, exceeding Wall Street estimates, and an adjusted EPS of $2.47 also surpassing projections [5] Analyst Ratings - The consensus view among analysts is moderately bullish, with a "Moderate Buy" rating overall; six out of nine analysts recommend a "Strong Buy," while three suggest a "Hold" [6] - The mean price target for STERIS is $288.86, indicating an 11.4% potential upside from current price levels [6]

Core Viewpoint - Steris (STE) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements, making it a valuable tool for investors [2][4]. - The recent upgrade for Steris reflects an optimistic earnings outlook that could lead to increased buying pressure and a rise in stock price [3][5]. Earnings Estimate Revisions - Steris is projected to earn $10.23 per share for the fiscal year ending March 2026, showing no year-over-year change, but the Zacks Consensus Estimate has increased by 1.7% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7]. - Steris's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Core Insights - STERIS plc is a leading provider of infection prevention products and services, with a market capitalization of $25.7 billion, offering a diverse range of medical equipment and consumables [1][2] Company Overview - STERIS is categorized as a large-cap stock, emphasizing its significant size and influence in the medical devices industry, particularly in infection prevention [2] - The company’s diverse portfolio serves as a comprehensive solution for healthcare providers, enhancing revenue and customer retention [2] Stock Performance - STERIS shares have experienced a decline of 4.2% from their 52-week high of $268.60, reached on November 25 [3] - Over the past three months, the stock has gained 3.6%, underperforming the S&P 500 Index, which saw a 5% increase [3] - In the longer term, STERIS shares rose 6% over six months, lagging behind the S&P 500's 13.9% gains, but have outperformed the index with a 19.3% increase over the past 52 weeks compared to the S&P 500's 13% [4] Recent Financial Results - On November 5, STERIS reported Q2 results, with revenue of $1.5 billion, exceeding analyst expectations of $1.4 billion [5] - The adjusted EPS of $2.47 also surpassed analyst estimates by 5.1% [5] - In contrast, Stryker Corporation, a competitor, has seen its stock decline by 8.4% over the past 52 weeks [5] Analyst Sentiment - Wall Street analysts maintain a bullish outlook on STERIS, with a consensus "Moderate Buy" rating from nine analysts [6] - The mean price target for STERIS is $288.86, indicating a potential upside of 12.3% from current price levels [6]

Core Insights - STERIS plc's service revenues are a key driver of growth in its Applied Sterilization Technologies (AST) segment, while macroeconomic challenges and currency fluctuations pose risks to its stock performance [1][9]. Group 1: Financial Performance - Over the past year, STERIS shares have increased by 26.2%, outperforming the industry growth of 4.2% and the S&P 500's rise of 18.5% [2]. - The company has a market capitalization of $21.75 billion and an earnings yield of 3.9%, compared to the industry's negative 4.9% [2]. - In the fiscal second quarter, the AST division saw a 10% year-over-year growth, driven by a 13% increase in service revenues [5]. - The Healthcare segment reported a 9% revenue growth year-over-year, with consumable revenues up 10% and capital equipment revenues up 4% [7]. Group 2: Segment Analysis - The AST segment offers a wide range of sterilization modalities through over 50 facilities globally, with a strong focus on ethylene oxide sterilization for single-use technologies in vaccine and biopharmaceutical manufacturing [4]. - The Healthcare segment benefits from the adoption of infection prevention consumables and capital equipment, with service revenues increasing by 13% year-over-year [6][7]. Group 3: Challenges and Concerns - Approximately 30% of STERIS's revenues are generated outside the U.S., making the company vulnerable to foreign currency exchange rate fluctuations [8]. - The current macroeconomic environment has led to a 6.2% increase in selling, general, and administrative expenses year-over-year, and a 4.4% rise in research and development expenses [10]. - Increased operating expenses may impact profitability if they do not lead to competitive product development [10].

Core Viewpoint - Steris (STE) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine a company's fair value, leading to buying or selling actions that affect stock prices [4]. Company Performance and Investor Sentiment - The upgrade for Steris reflects an improvement in its underlying business, suggesting that investors may respond positively by driving the stock price higher [5]. - Over the past three months, the Zacks Consensus Estimate for Steris has increased by 1.9%, with expected earnings of $10.20 per share for the fiscal year ending March 2026, indicating stability in earnings year-over-year [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, highlighting Steris's favorable position in this ranking [9][10]. - Stocks rated Zacks Rank 1 have historically generated an average annual return of +25% since 1988, showcasing the effectiveness of the rating system [7].

Core Insights - STERIS plc is a global provider of infection prevention products and services with a market cap of approximately $25 billion, serving hospitals, healthcare providers, and pharmaceutical manufacturers [1] - The company has shown strong stock performance, with a 20.2% return over the past 52 weeks, outperforming the S&P 500 Index's 12.3% gain [2] - STERIS reported a 10% revenue increase to $1.46 billion in Q2 2026, with adjusted EPS of $2.47, leading to a 6.9% stock price increase following the results [4] Financial Performance - For the fiscal year ending in March 2026, analysts project STERIS' adjusted EPS to grow nearly 11% year-over-year to $10.23, with a history of meeting or exceeding consensus estimates [5] - The company raised its fiscal 2026 outlook, increasing adjusted EPS guidance to $10.15 - $10.30 and expected free cash flow to $850 million [4] Analyst Ratings - The consensus rating among nine analysts covering STERIS is a "Moderate Buy," consisting of six "Strong Buy" ratings and three "Holds" [5] - Morgan Stanley raised its price target on STERIS to $295, indicating a potential upside of 12.3% from the current price, with a Street-high target of $300 suggesting a 17.8% upside [6]