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Mentor, Ohio-based STERIS plc (STE) provides infection prevention products and services worldwide. With a market cap of $20.3 billion, STERIS operates through Healthcare, Applied Sterilization Technologies (AST), and Life Sciences segments. The healthcare major is expected to announce its third-quarter earnings on Wednesday, Feb. 5.
Ahead of the event, analysts expect STERIS to report a non-GAAP profit of $2.32 per share, up 4.5% from $2.22 per share reported in the year-ago quarter. Furthermore, the company has surpassed or matched Wall Street’s bottom-line projections in each of the past four quarters. Its adjusted EPS for the last reported quarter increased 5.4% year-over-year to $2.14, exceeding analysts’ estimates by 1.4%.
For fiscal 2025, STERIS is expected to deliver an adjusted EPS of $9.10, up nearly 11% from $8.20 in fiscal 2024. While in fiscal 2026, its earnings are expected to surge 10.2% year-over-year to $10.03.
STE stock has plunged 7.2% over the past 52 weeks, substantially underperforming the S&P 500 Index’s ($SPX) 22% surge and the Healthcare Select Sector SPDR Fund’s (XLV) marginal gains during the same time frame.
STERIS stock tanked nearly 5.3% in the trading session after the release of its mixed Q2 results on Nov. 6. The company’s total revenues grew 7.3% year-over-year to $1.3 billion, which missed Wall Street’s expectations by 60 basis points. Meanwhile, due to an 8.4% increase in the cost of revenues to $750.1 million, STERIS’ gross margin contracted 56 basis points compared to the year-ago quarter to 43.6%. This resulted in its gross profits growing by a modest 6% compared to the year-ago quarter to $578.8 million, unsettling investor confidence.
Despite these challenges, STERIS demonstrated remarkable expense management, significantly cutting both operating and non-operating expenses, which resulted in a 30.1% year-over-year growth in net income to shareholders, reaching $150 million.
The consensus opinion on STE stock is strongly bullish, with an overall “Strong Buy” rating. Out of the seven analysts covering the stock, five recommend “Strong Buy” and two advise a “Hold” rating. Its mean price target of $255.83 indicates a 23.4% upside potential from current price levels.
