Let’s look at Wall Street analysts’ recommendations and target prices for Stryker (SYK) over the next 12 months. In a Reuters survey of 26 brokerage companies on November 18, 2016, about 61.5% of analysts rated it as a “buy,” and 30.8% rated it as a “hold.” Around 7.7% of analysts rated it as a “sell.”
The table above provides a recommendation summary for Stryker over the next year. The consensus 12-month target price for Stryker is $127.1, a ~14.9% return potential. Stryker was trading at $110.7 on November 17, 2016.
According to analysts’ most recent recommendations, the lowest one-year target price for Stryker was $94, implying a -15% return potential over the next 12 months. On the other hand, Stryker’s highest one-year target price was $145, implying a ~31% return potential over the next 12 months.
On November 1, 2016, BMO Capital Markets upgraded its view of Stryker. On October 30, 2016, brokerage company Canaccord Genuity rated the company as a “buy” and gave it a one-year target price of $127, implying a return of ~15%.
Peers Medtronic (MDT), Thermo Fisher Scientific (TMO) and Zimmer Biomet (ZBH) have average broker target prices of $94.6, $174.2, and $130.9, respectively. These figures imply returns of 17.9%, 17%, and 30%, respectively, in the next 12 months.
ETFs with exposure to Stryker
Investors interested in gaining focused exposure to Stryker can consider investing in the iShares U.S. Medical Devices ETF (IHI). IHI has 5.2% of its total holdings in Stryker. IHI is one of the largest US medical device ETFs. It tracks the Dow Jones U.S. Select Medical Equipment Index.
You may want to consider investing in dividend ETFs such as the Vanguard Dividend Appreciation ETF (VIG). VIG tracks the NASDAQ US Dividend Achievers Select Index, a market cap–weighted index consisting of US companies that have paid their shareholders increasing dividends for at least ten consecutive years. VIG has ~1% of its total holdings in Stryker.
Next, Let’s discuss Stryker’s views on the impact of the US election results on the medical device industry.