Boston, MA 09/19/2014 (wallstreetpr) – Financial advisor Goldman Sachs Group Inc (NYSE:GS) believes that there are a lot of potential drivers of upside rewards in medical technology company, Stryker Corporation (NYSE:SYK). The brokerage expects the company to gain from improvements in the macro environment for additional growth tailwinds and favorable valuation.
The investment advisor’s analyst David Roman has attended the annual investor meeting of the company, which highlighted levers for sustaining growth in the top line over the peers. He said that the meeting centered on idiosyncratic drivers of revenue and the continued opinion that core end-markets were stable.
The brokerage said that MAKO would continue to support the company in gaining shares within big joint reconstructive implants, i.e. 45% of sales, and the unveiling of a complete knee system and integration of products into the system should help Stryker Corporation (NYSE:SYK) more incremental drivers. This apart, the non-ortho business also provided a number of distinct drivers. This included Neurovascular, which was a new entrant with potential for high growth, and Sports Medicine.
Thirdly, the analyst believes that emerging markets remain an important factor and priority since these regions represent 8% of sales compared to worldwide MedTech’s 15%. The acquisition of Trauson along with organic investments would place Stryker Corporation (NYSE:SYK) to deliver more than 10% growth in these regions.
The financial advisor said that that the management of Stryker Corporation (NYSE:SYK) has also reiterated its 2014 earnings outlook of $4.75 – $4.80 a share during the meeting. The company also confirmed the tax gain, which would lift its normal growth by five – eight cents a share. Analyst said that he has modeled 2015 earnings growth estimation at 12%.
Another driver was the capital allocation with merger and acquisition remaining the top priority. This would be followed by dividends, as well as, share buyback.
The brokerage has retained its Buy rating on the shares of Stryker Corporation (NYSE:SYK) and kept a one-year price objective of $95 based on estimated cash earnings per share for 2015 and discounted cash flow.