Street Calls of the Week
Investing.com -- The medical technology sector continues to show resilience despite economic headwinds, with several companies positioning themselves for sustained growth.
KeyBanc Capital Markets has identified three standout performers in the MedTech space that demonstrate strong fundamentals and growth potential heading into 2025.
These companies have shown the ability to navigate challenges including tariff headwinds while maintaining operational excellence and pursuing strategic growth initiatives.
Integer Holdings (NYSE:ITGR) remains KeyBanc’s top pick with runway for sustained organic growth of 6-8%, outpacing the market by at least 200 basis points.
The company’s growth is supported by mid-single-digit underlying market volume growth and strategic investment in high-growth areas including neuromodulation, structural heart, neurovascular, and electrophysiology.
Integer has strengthened customer relationships and maintains solid near-term visibility into ordering patterns. KeyBanc expects operating income to grow at twice the rate of sales growth.
The company has also successfully absorbed expected 2025 tariff headwinds of $1-5 million within its existing adjusted operating income guidance of $319-331 million.
Mergers and acquisitions have emerged as a more visible part of Integer’s long-term growth strategy.
Integer Holdings reported third-quarter 2025 revenue of $468 million and an adjusted EPS of $1.79, beating expectations.
Following the release, both BofA Securities and Wells Fargo downgraded the company’s rating due to a weaker 2026 outlook, and Payman Khales completed his transition to President and CEO.
ICU Medical (NASDAQ:ICUI) has demonstrated significant operational and financial improvement, progressing from flat organic growth in 2023 to mid-single-digit organic growth in 2024 while exceeding gross margin expectations.
KeyBanc believes 2025 revenue will benefit from steady hospital volumes, increasing traction from new products like Plum Duo, and continued progress in previously challenged areas.
The joint venture with Otsuka provides approximately $200 million in after-tax proceeds, improves ICUI’s organic profile, and is expected to drive 300-400 basis points of gross margin expansion.
Despite approximately $30 million in unmitigated tariff headwinds, ICUI maintained the lower end of its original post-JV outlook for key financial metrics.
In recent news, ICU Medical announced strong second-quarter 2025 results with revenue of $548.9 million and an adjusted EPS of $2.10, leading the company to raise its full-year guidance.
Analyst actions included a price target increase from Piper Sandler and a reduction from KeyBanc.
Steris (NYSE:STE) shows strong momentum exiting fiscal year 2025 with a more favorable setup for FY26 compared to recent years. After working through challenging comparisons in Healthcare Capital Equipment, management indicates more balanced growth ahead.
Steris is well-positioned to benefit from steady end market utilization, stable backlog, approximately 200 basis points of pricing, and potential competitive advantages.
While absorbing roughly 75 basis points of estimated tariff headwinds in FY26, the company continues to expand operating margins.
Margin expansion is expected to become more visible in FY27, supported by operating leverage, improving mix, and restructuring savings. Additionally, FDA import restrictions on certain Olympus products may provide a tailwind for Steris in the automated endoscope reprocessor category.
Steris reported first-quarter 2025 revenue of $1.39 billion and an earnings per share of $2.34, exceeding analyst forecasts for the period.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.