Stryker Earnings: A Strong Finish to a Strong Year Sets Up For Continued Growth in 2024

Stryker capped off a strong year with more of the same in the fourth quarter, and we’ve slightly raised our fair value estimate to $242 per share. On the whole, full-year orthopedics and spine results nearly hit our estimates. In contrast, instruments and endoscopy substantially exceeded our 2023 projections. Though this outperformance wasn’t enough to materially shift our valuation, we incorporated more optimistic estimates for 2024-25 that did lift our fair value estimate, reflecting the firm new product launches, and strong ongoing execution. Trends in increased medical utilization should also support stronger top-line growth. Stryker’s ability to introduce meaningful innovation reinforces our view of the firm’s wide economic moat. For instance, the rollout of the new 1788 camera—Stryker’s 26th generation product since 1978—now utilizes fluorescence and infrared imaging to show what the human eye cannot discern. This is especially helpful for visualizing blood flow through tissue that surgeons have stitched together, a critical indicator for surgical success.