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Mentor, Ohio-based STERIS plc (STE) provides infection prevention products and services. Valued at $22 billion by market cap, the company offers sterilizers, washers, surgical tables, lights and equipment management systems, and endoscopy accessories.
Shares of this infection prevention products and services provider have underperformed the broader market over the past year. STE has declined 5.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17%. However, in 2025, STE stock is up 8.9%, surpassing the SPX’s 1.3% rise on a YTD basis.
Narrowing the focus, STE’s underperformance is also apparent compared to the iShares U.S. Medical Devices ETF (IHI). The exchange-traded fund has gained about 10.3% over the past year. Moreover, the ETF’s 9.7% gains on a YTD basis outshine the stock’s returns over the same time frame.
STE’s underperformance can be linked to challenges in effectively allocating funds, resulting in low returns on capital, and the divestiture of its CECS business.
On Feb. 5, STE reported its Q3 results and its shares closed up more than 2% in the following trading session. Its revenue was $1.37 billion, missing analyst estimates of $1.38 billion. The company’s adjusted EPS of $2.32 matched analyst estimates.
For the current fiscal year, ending in March, analysts expect STE’s EPS to grow 10.7% to $9.08 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the seven analysts covering STE stock, the consensus is a “Strong Buy.” That’s based on five “Strong Buy” ratings, and two “Holds.”
The configuration is consistent over the past three months.
On Feb. 6, JMP Securities analyst David Turkaly maintained a “Buy” rating on STE with a price target of $265, implying a potential upside of 18.4% from current levels.
The mean price target of $256.67 represents a 14.7% premium to STE’s current price levels.
