Key insights
- Stryker's Q1 earnings missed estimates by 15%, leading to a 7.1% decrease in the average analyst price target despite slightly increased EPS forecasts for 2026. The lowered price target suggests concerns beyond earnings, potentially impacting investor sentiment and creating short-term headwinds for the stock. The wide range in analyst price targets indicates uncertainty about Stryker's future performance.
It's shaping up to be a tough period for Stryker Corporation (NYSE:SYK), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$6.0b, statutory earnings missed forecasts by 15%, coming in at just US$1.93 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Stryker after the latest results.
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Taking into account the latest results, the consensus forecast from Stryker's 26 analysts is for revenues of US$27.3b in 2026. This reflects a satisfactory 7.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 46% to US$12.74. In the lead-up to this report, the analysts had been modelling revenues of US$27.3b and earnings per share (EPS) of US$12.16 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Stryker
The average the analysts price target fell 7.1% to US$389, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Stryker analyst has a price target of US$465 per share, while the most pessimistic values it at US$315. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 11% growth on an annualised basis. That is in line with its 9.9% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.0% per year. So it's pretty clear that Stryker is forecast to grow substantially faster than its industry.
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Stryker following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Stryker. Long-term earnings power is much more important than next year's profits. We have forecasts for Stryker going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Stryker that you should be aware of.
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