Stryker upgraded on strong execution and room for rebound

Investing.com -- Analysts at Citizens upgraded Stryker Corp to Market Outperform from Market Perform, saying the medical device maker’s execution remains strong while the valuation has become more attractive after a period of share underperformance.

Citizens set a $440 price target, arguing that Stryker stands out after lagging both peers and its own historical returns this year. The stock is down about 12% from its late July high and trades at roughly 21x forward earnings, a level the analysts see as reasonable for a large-cap MedTech company with a long track record of delivery.

The upgrade reflects a broader review of valuation, performance, and forward expectations across the MedTech sector. Citizens said Stryker repeatedly emerged as a high-quality name that has fallen out of favor despite no visible deterioration in its business.

The analysts pointed to Stryker’s decentralized operating model as a key strength. Each business runs with its own leadership and commercial teams, allowing for focused execution while still benefiting from global manufacturing scale. That structure, they said, supports disciplined capital allocation and steady performance across cycles.

Mergers and acquisitions remain central to the investment case. Citizens said Stryker’s ability to source, integrate, and, when needed, exit deals is best-in-class within MedTech. Roughly 70% of capital allocation over the next planning cycle is expected to go toward acquisitions, with management highlighting improved integration capabilities built over the past five years.

Margins are another focus. Stryker expects further operating margin expansion through 2028, building on gains already delivered in 2024 and 2025. Citizens said this reflects operational improvements that now appear embedded in the business, even as the company manages external pressures such as tariffs.

On the financial outlook, Stryker is targeting sales growth at the high end of the MedTech sector and double-digit earnings growth through 2028, including the impact of acquisitions. Citizens views those targets as achievable and potentially conservative.

If the shares remain near current levels into year-end, the analysts said Stryker would enter 2026 at its lowest valuation of the decade, setting up conditions for a recovery in stock performance.