Stryker fell 26% on temporary shutdowns while orders stayed firm. I see 26.5% upside to $350.23 as backlog ships and margins recover.
Key points
- 9% organic growth in Q2 2026 from higher unit volume (more products sold) with flat pricing that quarter.
- $14.85 billion sales needed in H2 2026 means 12.3% growth versus H2 2025 after disruption that year.
- $276.97 price on Oct 8 2026 equals 18.4 times FY26 adjusted earnings (profit per share) that year.
The call
The slowdown looks lasting to the market. The shares cost $276.97 on Oct 8 2026. That price equals 18.4 times FY26 adjusted earnings guidance that year. That level assumes 9% growth in Q2 2026 was delayed shipments that soon fade.
Quarterly sales rebound after March shutdown ($ billions)- Reported revenue
- My forecast
SEC XBRL and 10-Q filings through July 31 2026; Q3 FY26E onward my forecast.
Orders point to a snap back instead. Demand stayed firm with flat pricing in Q2 2026. Plants restarted in April 2026 and backlog (orders waiting to ship) for beds and Mako robots (surgery guidance tools) covers the ramp in H2 2026.
Valuation
| Item | Figure |
|---|
| FY26 adjusted earnings guidance | $15.03 a share that year |
| FY27 adjusted earnings estimate | $16.68 a share next year |
| Target multiple | 21 times earnings next year |
| Twelve month target | $350.23 a share by Oct 2027 |
From $277 to $350 target in two steps ($ per share)My arithmetic: $15.03 2026 EPS growing 11% times 21, from Oct 8 2026 price.
The 21 times multiple (price divided by earnings) fits steady mid single digit sales growth with margin repair. It sits below past peaks for steady device growers. Growth plus rerating supports 26.5% upside by Oct 2027, so the call is a buy.
Risks
- Capital backlog fails to ship if output stalls, seen in weak Q3 2026 shipments and low inventory build that quarter.
- Vascular share loss lasts after plant backorders, seen in falling Q3 2026 vascular sales and longer backorders that quarter.
- CEO handoff hurts focus in H1 2027, seen in delayed product launches and higher costs in that half.
What would change my mind
I am wrong if Q3 2026 orders or procedures fall and full year guidance is cut that quarter.