STERIS excels in healthcare equipment deliveries, stock PT raised by Piper Sandler By Investing.com

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On Friday, Piper Sandler adjusted its outlook on STERIS (NYSE:STE), a leading provider of infection prevention and other procedural products and services. The firm raised the price target to $225.00 from the previous $220.00, while maintaining a Neutral rating on the stock.

This adjustment comes after STERIS reported fourth-quarter results that exceeded expectations, largely driven by robust healthcare equipment deliveries.

STERIS disclosed its fiscal fourth-quarter results on Thursday and conducted its earnings call today. The company’s financial performance for the quarter surpassed both Piper Sandler’s projections and the consensus due to exceptional healthcare equipment deliveries.

Additionally, STERIS provided revenue and earnings per share guidance for fiscal year 2025 that was higher than anticipated, which is particularly noteworthy considering the year-over-year comparisons in healthcare equipment and a backlog that has stabilized to more normal levels.

The updated guidance and financial outcomes have drawn significant attention from investors. Despite the challenges in aligning with management’s guidance, the positive surprises in the company’s results and outlook have led to an 8% increase in share value in premarket today. This surge has pushed the stock’s valuation based on continuing operations back to what Piper Sandler considers fully valued, at approximately 25 times the next twelve months’ price-to-earnings ratio.

The firm acknowledged the robust results and guidance from STERIS, which have positively impacted the stock. In light of these developments, Piper Sandler reiterated its Neutral rating, while also increasing the price target to $225, reflecting the strong performance and future expectations for the company.

InvestingPro Insights

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As STERIS (NYSE:STE) continues to impress investors with its robust financial performance, real-time data from InvestingPro offers additional insights into the company’s market position. With a market capitalization of $22.33 billion and a P/E ratio of 38.93, STERIS is trading at a high earnings multiple, which aligns with Piper Sandler’s assessment of the stock being fully valued. However, the company’s significant return over the last week of 8.74% echoes the positive reaction to its fiscal fourth-quarter results and upward guidance for fiscal year 2025.

InvestingPro Tips highlight that STERIS has maintained its dividend payments for 20 consecutive years, with a dividend yield of 0.92% as of the last twelve months ending Q4 2024. This consistent return to shareholders may be attractive to long-term investors. Additionally, the company’s liquid assets exceed short-term obligations, indicating a strong liquidity position that could support ongoing operations and investments.

For investors looking for more in-depth analysis and additional InvestingPro Tips, there are 9 more tips available for STERIS on InvestingPro. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to comprehensive financial data and expert insights to inform your investment decisions.

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