STE changes
Pick any two versions below to diff them.
- Price
- $222.66 → $227.12(+2.0%)
- Next earnings
- Nov 5, 2026 → Nov 4, 2026
- Next earnings is estimate
- Yes → No
- Thesis
- The market prices STERIS for slower growth in its higher-margin AST business, for tariff costs and for the cost of its new Xodus purchase. AST revenue grew only 5% at constant currency in Q1 fiscal 2027, and its capital equipment revenue fell 13%. Ethylene oxide sterilization faces stricter US environmental rules. Tariffs raise costs in Healthcare. On October 11, 2026, STERIS agreed to buy Xodus Medical for $2.1 billion in cash, mostly with new debt, for a business with expected 2026 revenue of about $245 million. Results are on plan: in Q1 fiscal 2027, revenue rose 7%, constant currency organic growth was 6% and adjusted EPS rose to $2.59 from $2.34. For the gap to close, three things must be true. STERIS must reach its fiscal 2027 guidance of 6% to 7% constant currency organic growth and adjusted EPS of $11.10 to $11.30. AST growth must speed up as medical device makers increase volumes. The Xodus purchase must close by the end of 2026 and add to growth and margins, as STERIS expects. The Q2 fiscal 2027 report, removed: estimated for about added: on November removed: 5, added: 4, 2026, is the next test. The fiscal 2028 outlook in May 2027 is the main test. If these checks pass, the gap can close over the next three to five quarters. The main reason it may not close is a long slowdown in AST demand from medical device makers.
- Checkpoints
- Nov removed: 5, 2026 (estimate): added: 4, 2026: Q2 fiscal 2027 earnings: AST growth. Pending. Watch: Organic growth on track for the 6% to 7% guidance and faster AST service growth pass; a cut to the guidance or slower AST growth fails. Dec 31, 2026 (estimate): Xodus purchase closes. Pending. Watch: A close by December 31, 2026, with debt financing on good terms, passes; a delay or a regulatory challenge fails.