STE
STERIS plc$222.08
Unclear
Target $241.55
Report: Mar 13, 2026Healthcare • Medical - Devices • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$222.08+8.8%
Rec: UnclearConviction: Low
Entry Target
$185.81
(16% below current)
Fair Value
$241.55
(9% above current)
Stop Loss
$173.21
(22% below current)
Position Size
None
Time Horizon
Long-Term (3+ Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$269.44
52 Week Low$204.90
Avg. 3 Month Volume816K
Efficiency
LTM Gross Margin44.1%
LTM EBITDA Margin25.5%
LTM EBIT Margin17.1%
LTM Operating Margin17.1%
LTM ROA6.8%
LTM ROE10.2%
LTM ROIC18.9%
LTM ROCE10.6%
Capital Structure
Market Cap (MM)$21.7B
Enterprise Value (MM)$23.3B
Shares Outstanding98.08M
Total Debt (MM)$2.05B
Cash & Equivalents (MM)$423.70M
LTM Net Debt (MM)$1.63B
LTM Net Debt/EBITDA1.1x
Growth
TTM Rev. Growth14.4%
Last 3-Yr Rev. CAGR6.8%
Last 3-Yr EBITDA CAGR24.0%
Last 3-Yr EPS CAGRN/A
Valuation
Street Target Price$256.67
LTM EV/Revenue4.0x
LTM EV/Gross Profit9.1x
LTM EV/EBIT23.3x
LTM EV/EBITDA15.7x
LTM P/E30.6x
LTM EV/FCF24.9x
LTM P/FCF23.2x
LTM P/TB4.6x
LTM P/B3.0x
Dividend Yield1.1%
Payout Ratio33.3%
Executive SummarySituation: Current price is $222.08 versus fair value $241.55 (8.8% expected return), and valuation confidence is stable. Debate: Bull case depends on AST Capacity Expansion and Bioprocessing Rebound Management has been expanding AST capacity for eight years, and a rebound in pharma capital spending could drive service growth back to double digits, validating the company's long-term re... Bear case centers on Moat Erosion and Margin Compression The primary risk is that structural cost inflation (tariffs, labor) permanently impairs the company's pricing power, leading to a sustained decline in ROIC and a multiple de-rating. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
The bull case rests on the recession-resistant nature of the 70% recurring revenue model and the successful integration of recent acquisitions driving FCF growth of 26.9% to $787 million. Furthermore, the Healthcare backlog of $369 million and AST capacity expansions provide a clear path to 6-8% organic revenue growth.
Bear Case
The bear case highlights moat erosion evidenced by gross margins trailing peers by 840 basis points and a $55 million annual tariff headwind. Additionally, negative incremental ROIC of -41.9% suggests that recent capital expenditures and acquisitions are not delivering returns above the cost of capital.
Key Catalysts
Mid-Term (6-18 months)Impact: High
AST Capacity Expansion and Bioprocessing Rebound Management has been expanding AST capacity for eight years, and a rebound in pharma capital...
Near-Term (0-6 months)Impact: Moderate
Successful Tariff Mitigation Demonstrating the ability to offset the $55 million annual tariff burden through supplier shifts and productivi...
Long-Term (18+ months)Impact: Moderate
STERIS is at a critical juncture as it navigates a CFO transition and escalating tariff headwinds, making the next two quarters essential fo...
Primary Risks
Concern: High
Moat Erosion and Margin Compression The primary risk is that structural cost inflation (tariffs, labor) permanently impairs the company's pr...
Concern: Medium
Regulatory and Litigation Risk (Ethylene Oxide) Ongoing scrutiny of EtO emissions could lead to further costly settlements or forced facilit...
Concern: Medium
The stewardship verdict is strong, primarily due to an exceptional board that includes governance heavyweights like Richard Breeden (former...
Recent Activity
2026-02-05SEC Filing (8-K)
-7.74%STERIS reports Q3 FY2026 revenue up 9% with adjusted EPS of $2.53
2025-11-06SEC Filing (8-K)
+6.94%STERIS reports Q2 FY2026 revenue up 10% with increased outlook
2025-08-07SEC Filing (8-K)
+6.79%STERIS reports Q1 FY2026 revenue up 9% with strong EPS growth
2025-05-15SEC Filing (8-K)
+8.52%STERIS reports FY2025 revenue up 6% with adjusted EPS of $9.22
2024-11-07SEC Filing (8-K)
-5.28%STERIS reports fiscal 2025 Q2 revenue up 7% to $1.33B with 7% constant currency organic growth
Valuation Table
9.8/10Decision Grade
Scenario Range
$145
Bear
$205
Base
$244
Bull
$222