KeyBanc’s Positive View on STERIS (STE) Driven by MedTech Momentum

STERIS plc (NYSE:STE) is one of the best defensive stocks to invest in according to analysts. As of August 1, the stock stands out as only the second name on this list with a positive year-to-date performance (+10.4%).

The company generates more than $750 million in free cash flow annually, with guidance pointing to $770 million for FY 2026. This strong cash generation supports consistent shareholder returns through dividends and buybacks. Most recently, STERIS raised its quarterly dividend by 10% to $0.63 per share, pushing its dividend yield to approximately 1%.

KeyBanc’s Positive View on STERIS (STE) Driven by MedTech Momentum

A cutting edge medical device in a sterile surgical setting, being operated by a skilled surgeon.

In the long run, STERIS is targeting mid-to-high single-digit revenue growth and guides to delivering double-digit gains in adjusted earnings per share. This combination underpins the positive view around the stock.

Analyst confidence in the name was further reflected on July 22, when KeyBanc analyst Brett Fishbin raised his price target on STERIS to $288 from $277 while reiterating an Overweight rating. According to KeyBanc, recent MedTech trends have been encouraging, especially in the hospital category, where procedure volumes grew at a high-single-digit rate through Q2. While tariff-related uncertainty remains a concern, KeyBanc believes these risks are now well understood and priced into consensus expectations.

STERIS plc (NYSE:STE) provides innovative healthcare and life science products and services worldwide. Its offerings include consumable products, such as detergents and endoscopy accessories; services, including equipment installation and maintenance; and capital equipment, such as sterilizers and surgical tables.

While we acknowledge the potential of STE to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than STE and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.