Valued at a market cap of $23.9 billion, STERIS plc (STE) provides infection prevention and surgical products and services, including surgical equipment, sterilizers, contamination control systems, and contract sterilization services. The Mentor, Ohio-based company serves healthcare providers, pharmaceutical companies, research facilities, and medical device manufacturers. 

This medical device company has underperformed the broader market over the past 52 weeks. Shares of STE have gained 7.1% over this time frame, while the broader S&P 500 Index ($SPX) has surged 10.2%. However, on a YTD basis, the stock is up 18.2%, considerably outpacing SPX’s 1.3% drop. 

Narrowing the focus, STE has also lagged behind the iShares U.S. Medical Devices ETF’s (IHI) 9.1% return over the past 52 weeks. Nonetheless, it has outpaced the ETF’s 4% uptick on a YTD basis. 

On May 14, STE released its Q4 results, and shares of the company surged 8.5% in the following trading session. Its revenue improved 4.3% year-over-year to $1.5 billion, driven by strong performance in the healthcare and Applied Sterilization Technologies (AST) segments, though partially offset by a decline in Life Sciences revenue. Additionally, its adjusted EPS came in at $2.74, up 6.2% from the year-ago quarter. The growth in profitability was supported by higher volumes, improved pricing, and benefits from restructuring initiatives.

Looking ahead to fiscal 2026, STE expects revenue from continuing operations to grow by 6% to 7%, and forecasts adjusted EPS in the range of $9.90 to $10.15, representing a year-over-year increase of 7% to 10%.

For fiscal 2026, ending in March 2026, analysts expect STE’s EPS to grow 8.2% year over year to $9.98. The company’s earnings surprise history is promising. It topped or met the consensus estimates in each of the last four quarters. 

Among the seven analysts covering the stock, the consensus rating is a “Strong Buy” which is based on five “Strong Buy,” and two “Hold” ratings. 

This configuration is more bullish than a month ago, with an overall “Moderate Buy” rating, consisting of four analysts suggesting a “Strong Buy.”

On May 19, Patrick Wood from Morgan Stanley (MS) maintained a “Hold” rating on STE with a price target of $260, which indicates a 7% potential upside from the current levels. 

The mean price target of $273.67 represents a 12.6% premium from STE’s current price levels, while the Street-high price target of $280 suggests an upside potential of 15.2%.