Stryker Earnings: Improving Supply Chain and Staffing Issues Should Accelerate Growth

The strength Stryker displayed as it exited 2022 has continued full force through the first quarter, and we’ve modestly raised our fair value estimate to $217 per share after adjusting upward our expectations for the remainder of 2023. Stryker racked up another quarter of stellar growth with revenue up 14% in constant currency, though we recognize the prior-year period was rather weak due to the omicron variant. Nonetheless, Stryker’s impressive execution (especially outside the U.S.) along with increasing medical utilization lead us to believe our original projections could be too conservative. However, even with this slight boost to our intrinsic value, Stryker shares remain overvalued, from our perspective. We saw little in the quarter to change our view of Stryker’s wide economic moat.