Stryker has fallen 26% in a year on a cyber attack, a plant disruption and a CEO change. At 16.7 times my 2027 earnings, recovery looks fairly priced. I expect about 11% upside, so the stock tracks the market.
Key points
- $15.03 a share is the midpoint of 2026 adjusted earnings guidance; the stock costs 18.4 times that.
- -26% over twelve months, 41 points behind the S&P 500 fund, on a cyber attack and a plant disruption.
- $307 twelve-month target, about 11% above the price, so a hold.
The call
The price asks for a clean recovery, not a boom. At $276.97 the stock is 18.4 times 2026 adjusted earnings and 16.7 times my 2027 estimate. That is a low multiple for a business growing sales near 9%.
I believe the recovery is real but slow. Orders are elevated and no cancellations were reported. Yet vascular sales fell 6.7% and production limits persist. Growth should come in near 9%, with earnings up about 10%.
Stryker adjusted EPS and price multiple scenarios ($ per share)Source: company guidance July 30, 2026; 2027E is my estimate. Target at 18.5x 2027E.
Valuation
| Item | Figure |
|---|
| 2026 adjusted EPS (guidance midpoint) | $15.03 |
| 2027 EPS growth (my estimate) | 10.5% |
| 2027 EPS | $16.60 |
| Multiple (18.5 times) | between 17 and 21 times |
| Target price | $307.10 |
I use 18.5 times, below the 19 times a steady 9% grower usually earns, because execution is unproven and the CEO is changing. The downside at 16 times is about $266, down 4%. The upside at 21 times is about $349, up 26%. That skew is attractive but the central case falls short of the 12% buy line.
Risks
- Production fails to catch up: watch third-quarter results on October 29 for organic growth near 9% and vascular recovery.
- Inari plant problems cost lasting share: watch vascular growth and backorder comments.
- Succession distracts management or acquisitions disappoint: watch ZuriMED terms, buybacks resuming, and guidance in January.
What would change my mind
A third-quarter report showing vascular back to growth and guidance raised would make me a buyer; another cut to guidance would make me a seller.