An analyst for RBC Capital Markets upgraded shares of Stryker Corp. on Monday, saying the company will do more business in 2010 due to increased demand for orthopedic surgeries and greater spending by hospitals.
Stryker also announced it plans to buy Ascent Healthcare Solutions, which reprocesses and remanufactures medical devices, for $525 million in cash.
Analyst Glenn Novarro raised his rating on Stryker stock to "Outperform" from "Sector Perform." He thinks the company will surpass Wall Street expectations in 2010 because hospitals are budgeting for more knee and hip replacement procedures and capital spending, which has been constrained due to the recession, will increase. Novarro said that will help Stryker's MedSurg equipment business.
According to Thomson Reuters, analysts expect Stryker to report a profit of $3.27 per share in 2010 and revenue of $7.15 billion. Novarro said the Kalamazoo, Mich., company will forecast profit of $3.37 per share and revenue of $7.71 billion.
Novarro increased his price target to $57 per share from $45.
Stryker shares rose 30 cents to $49.99 Monday afternoon. The stock has traded between $30.82 and $50.52 over the last year, and reached a high of $51.32 Monday morning.