SYK : NYSE : US$72.55
BUY
Target: US$76.00
COMPANY DESCRIPTION:
Stryker Corporation is a global developer, manufacturer and marketer of medical devices and instrumentations in the orthopedic and other medical specialties.
Life Sciences — Biomedical Devices and Services
SYK Q3/13 SUPPORTS THESIS OF IMPROVING ORTHO SECTOR, MAINTAIN BUY, TARGET TO $76
Investment recommendation
We maintain our BUY rating following the release of Q3/13 results with solid revenues offsetting a weaker-than-expected adjusted EPS. Stryker continues to grow at above-market rates, taking share in the hip and trauma/extremities markets, and maintaining its position in knees despite recent competitive launches. New leadership and operating structures internationally are gaining traction, as OUS was strong in the Q3/13. We maintain our BUY on Stryker given solid top-line results, which we believe outweighs short-term profit gyrations.
Investment highlights
Stryker reported Q3/13 results with solid revenues relative to our expectations. U.S. hip and trauma/extremities were strong while knees were in-line.
Adjusted EPS was weaker than expected due to FX impact. We believe investors will focus on revenue growth given the lack of growth in large-cap med tech.
Management noted its intent to leverage the MAKO technology as a capstone within its recon platform and drive longer-term share shift in the US market.
Valuation
We are increasing our price target to $76.00 from $72.00
