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On Wednesday, Stryker Corporation (NYSE:SYK) received a positive outlook from Citi, as the firm initiated coverage with a Buy rating and a price target of $450. The medical technology giant, currently valued at $149 billion, is trading near its 52-week high of $406.19. According to InvestingPro analysis, while the stock appears overvalued compared to its Fair Value, the company maintains strong financial health with a "GOOD" overall rating. The move follows the recent acquisition of Inari Medical (TASE:BLWV) by Stryker, completed on February 19, 2025. The strategic purchase was valued at $4.9 billion, or $80 per share, and brought Inari’s ClotTriever and FlowTriever systems into Stryker’s portfolio. This acquisition builds on Stryker’s impressive track record, with the company achieving 10.23% revenue growth over the last twelve months and maintaining solid profitability with earnings per share of $7.76. These systems are designed to treat venous thromboembolism (VTE), a condition that affects over 900,000 patients in the U.S. each year, with less than 20% currently receiving mechanical thrombectomy treatment.
The acquisition is seen as a diversification strategy for Stryker, which has a history of expanding its business through various acquisitions. Inari’s products address a significant market opportunity, with management estimating a global total addressable market (TAM) of $15 billion, which includes $6 billion in the U.S. market alone. This market is expected to grow at an annual rate of 20%.
Citi’s updated financial model takes into account the expected contributions from Inari to Stryker’s performance. Inari is forecasted to generate $590 million in revenue during the approximately 10-month period in 2025. Despite the anticipation of Inari being dilutive to Stryker’s operating margins by 0-20 basis points, it is also projected to add $0.20 to $0.30 to earnings per share (EPS).
The acquisition is seen as another significant step in Stryker’s evolution, as the company continues to build a diversified business that not only strengthens its current product silos but also expands into adjacent markets. With the integration of Inari’s products, Stryker aims to capitalize on the underpenetrated VTE market and drive further growth. For deeper insights into Stryker’s financial health and growth prospects, InvestingPro offers comprehensive analysis, including 15+ additional ProTips and a detailed Pro Research Report, helping investors make informed decisions about this healthcare equipment leader.
In other recent news, Stryker Corporation has completed its acquisition of Inari Medical, Inc. for approximately $4.94 billion, marking a significant expansion in its product offerings. This acquisition was finalized through a merger with Stryker’s subsidiary, Eagle 1 Merger Sub, Inc., and is expected to enhance Stryker’s operational capabilities and market reach. To finance this acquisition, Stryker issued $3 billion in new debt through a substantial offering consisting of four series of notes with maturity dates ranging from 2027 to 2035. The proceeds from these notes are earmarked for the acquisition and other corporate purposes.
Additionally, Stryker announced an increase in its quarterly dividend to $0.84 per share, reflecting a 5.0% rise from the previous year, indicating the company’s commitment to returning value to shareholders. In governance news, board member Allan Golston will retire at the upcoming annual shareholders meeting in May 2025, marking a change in the board’s composition. Meanwhile, Truist Securities has raised its price target for Stryker to $413, up from $409, while maintaining a Hold rating. The firm cited Stryker’s recent performance and strategic changes but noted that the company’s profitability growth lags behind some peers in the MedTech sector.
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