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On Thursday, JMP Securities sustained a positive outlook on STERIS shares (NYSE:STE), maintaining a Market Outperform rating and a price target of $265.00. With a market capitalization of $21.9 billion, STERIS has demonstrated strong financial fundamentals, earning a "GREAT" financial health score according to InvestingPro analysis. The firm updated its financial model to incorporate the company's third fiscal quarter of 2025 results, which showed a 6% year-over-year organic growth on a constant currency basis. STERIS reported quarterly revenue of $1.37 billion, which was slightly below the consensus estimate of $1.382 billion and JMP's projection of $1.378 billion. The adjusted earnings per share (EPS) for the quarter were $2.32, showing a 10% increase compared to the previous year, aligning with both JMP's and Wall Street's expectations. The company's impressive 15.29% revenue growth over the last twelve months and consistent dividend payments for 21 consecutive years highlight its strong market position.
STERIS's financial performance in the third quarter reflects steady growth, with revenues increasing organically by 6% year-over-year when adjusted for constant currency fluctuations. Despite the slight miss in revenue against the consensus and JMP's estimates, the company's ability to meet the expected adjusted EPS benchmarks demonstrates a solid profit performance.
The reiteration of the Market Outperform rating by JMP Securities indicates the firm's continued confidence in STERIS's market position and future prospects. The $265 price target suggests that JMP sees potential for the stock to grow in value, offering a positive signal to investors about the stock's trajectory. According to InvestingPro analysis, STERIS appears slightly undervalued at current levels, though it trades at a relatively high P/E ratio of 35.5x. Get access to 10+ additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.
Investors in STERIS shares on the New York Stock Exchange can consider the maintained rating and price target as a reflection of the company's consistent financial results and the expectation of continued performance in line with analyst projections. The company's strong dividend growth of 9.62% and robust cash flows that sufficiently cover interest payments demonstrate its financial stability. Discover more detailed insights and access the comprehensive Pro Research Report for STERIS, along with 1,400+ other top stocks, exclusively on InvestingPro.
The financial analysis provided by JMP Securities, including the updated model with the latest quarterly figures, serves as a basis for their sustained rating and price target for STERIS. This information may be useful for investors and market watchers tracking the company's stock performance and assessing its investment potential.
In other recent news, STERIS plc reported its third-quarter earnings for fiscal year 2024, revealing a slight miss on earnings per share (EPS) but a notable revenue beat. The company posted an EPS of $2.32, just below the forecasted $2.33, while revenue reached $1.4 billion, surpassing expectations of $1.38 billion. This reflects a 6% increase in total revenue year-over-year, with strong growth driven by the healthcare and AST segments. Additionally, STERIS agreed to settle the majority of pending personal injury claims related to ethylene oxide exposure, with up to $48.15 million set aside for this purpose. The settlement will be financed through cash on hand and borrowings under the existing credit facility, and the company will record a charge for the settlement in its fiscal year ending March 31, 2025.
The company also saw a gross margin increase of 90 basis points, reaching 44.6%. Despite the slight EPS miss, STERIS demonstrated solid performance, maintaining a consistent growth trajectory. In terms of analyst activity, there is no mention of upgrades or downgrades from the provided context. The company remains cautiously optimistic about its future, with CEO Dan Crescio expressing confidence in the utility-driven nature of STERIS's products. These developments highlight STERIS's ongoing efforts to manage legal challenges while continuing to drive revenue growth.
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