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With a market cap of $24.6 billion, STERIS plc (STE) is a global provider of infection prevention products and services, operating through its Healthcare, Applied Sterilization Technologies (AST), and Life Sciences segments. It serves hospitals, healthcare providers, and pharmaceutical manufacturers with a broad portfolio of equipment, consumables, and technical services designed to ensure safety, sterility, and compliance worldwide.
Shares of the Mentor, Ohio-based company have outpaced the broader market over the past 52 weeks. STE stock has returned 13.5% over this time frame, while the broader S&P 500 Index ($SPX) has gained 11.7%. However, shares of the company have declined marginally on a YTD basis, lagging behind SPX's slight rise.
Looking closer, shares of the medical products maker have also outperformed the State Street Health Care Select Sector SPDR ETF's (XLV) 7.4% increase over the past 52 weeks.
Despite reporting better-than-expected Q3 2026 revenue of $1.5 billion on Feb. 4, shares of STE tumbled 7.7% the next day. Gross margin fell 70 basis points year-over-year to 43.9% and EBIT margin declined 40 basis points to 22.9%, while management flagged a $55 million tariff headwind in fiscal 2026 and said the higher end of its $10.15 - $10.30 EPS guidance is unlikely. The selloff was compounded by management’s warning of a second-half slowdown, tough Q4 comparisons in AST capital equipment.
For the fiscal year ending in March 2026, analysts expect STERIS’ adjusted EPS to grow 10.7% year-over-year to $10.21. The company's earnings surprise history is promising. It topped the consensus estimates in the last four quarters.
Among the nine analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on six “Strong Buy” ratings and three “Holds.”
On Jan. 31, Piper Sandler analyst Jason Bednar reiterated a “Buy” rating on STERIS and set a price target of $300.
The mean price target of $288.43 represents a premium of 14.8% to STE's current price. The Street-high price target of $300 suggests a 19.4% potential upside.
