TD Cowen has launched coverage of Stryker (NYSE: SYK) and assigned a Hold rating alongside a $387.00 price target, a move that arrived two days before the company's scheduled earnings release on January 29. The research note framed Stryker as one of the stronger MedTech performers under current leadership, while also weighing valuation considerations.
In its initiation, TD Cowen described Stryker as "one of the most impressive MedTech stories of the last decade-plus" under CEO Kevin Lobo’s stewardship. The firm highlighted the company’s consistent high-single to low-double-digit organic revenue growth and an intensifying focus on expanding profit margins. Supporting data from InvestingPro cited in the initiation shows revenue growth of 10.95% over the last twelve months and a five-year revenue compound annual growth rate of 9%, reinforcing Stryker’s prominence in the Healthcare Equipment & Supplies industry.
TD Cowen signaled there may be upside relative to consensus projections. While consensus expectations point to roughly 8% sales growth through the end of the decade, the research firm noted Stryker has not recorded growth below 10% since 2022. TD Cowen pointed to recent portfolio management actions — specifically the acquisition of NARI and the divestiture of its spine business manufacturing operations in France — as factors that could help the company sustain near double-digit growth rates.
The analyst also underscored Stryker’s durability as a cash-returning company: the company has paid dividends for 35 consecutive years and recorded 10% dividend growth over the past twelve months. In a related corporate disclosure, Stryker announced a 4.8% raise to its quarterly dividend, increasing it to $0.88 per share. That dividend is scheduled to be payable on January 30, 2026, to shareholders of record at the close of business on December 31, 2025.
On profitability, TD Cowen referenced Stryker’s long-range plan that calls for about 150 basis points of margin expansion over the next three years, with 2026 expected to be on the lower end before ramping up in subsequent years. The firm suggested this trajectory could deliver near-term upside to both top-line and bottom-line results. Current operating profitability metrics cited include a gross profit margin of 65.05% and a balance sheet and cash-flow profile that provide sufficient cash flows to cover interest payments while operating with a moderate level of debt.
TD Cowen’s $387 price target is derived by applying a 26x multiple to its 2026 EPS estimate of $14.89. That 2026 EPS estimate is marginally below consensus, which the note put at $14.97. The firm observed that Stryker’s valuation using next-twelve-months consensus EPS sits at 23.5x, which is about 10% below its three-year and five-year averages. At the same time, other commonly referenced metrics show premium pricing: the company currently trades at a P/E ratio of 47.09, an EV/EBITDA of 22.8 and a Price/Book of 6.27. InvestingPro analysis mentioned in the coverage characterizes the stock as slightly overvalued at the present share price of $356.98.
The initiation also highlighted recent strategic and personnel developments at Stryker. VB Spine LLC has completed the purchase of Stryker’s spine implant manufacturing facility in France, a move that adjusts the company’s manufacturing footprint. In leadership news, Stryker named Spencer Stiles as President and Chief Operating Officer effective January 1, 2026. Stiles, who has worked at the company for 27 years, will take on responsibility for global business strategy and mergers and acquisitions.
Several other research firms and market commentators have weighed in on Stryker in close proximity to TD Cowen’s note. Citizens upgraded the stock to Market Outperform, citing what it views as an attractive valuation opportunity. Piper Sandler reiterated Stryker’s leading role in the joint replacement robotics market, calling out the advanced capabilities of the company’s Mako robot. These external views, along with TD Cowen’s initiation, reflect a mix of confidence in Stryker’s market positioning and attention to valuation dynamics.
Investors who want more granular research data can access a comprehensive Pro Research Report, which is available for Stryker and more than 1,400 other U.S. equities, according to the coverage note.
Contextual considerations
The initiation by TD Cowen arrives at a moment when Stryker is balancing continued top-line growth, plans for margin improvement and corporate restructuring activity. The firm’s Hold rating and price target incorporate both the company’s historical growth record and present valuation metrics, leaving room for potential upside should execution on margin and portfolio strategy track with the company’s goals.