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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%.

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.

READ NEXT: 10 Most Oversold S&P 500 Stocks So Far in 2025 and 10 Most Oversold Semiconductor Stocks So Far in 2025.

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

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When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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